United Arab Emirates private-sector player Dana Gas has won a key arbitration on the termination of the sale of its Egypt focused oil and gas assets to Texas-based IPR Energy, that was announced last year.
Dana Gas said in a statement on Sunday it had received an arbitration award from the London Court of Arbitration that ruled in favour of the company’s move to terminate the sale of its Egyptian oil and gas assets to the IPR Energy group.
“The award now means the assets will continue to be operated by Dana Gas for the benefit of its shareholders and the people of Egypt,” the UAE-based player said.
Dana Gas last year announced the sale of its gas condensate assets onshore Egypt to IPR Energy in a deal that was worth $236 million, Upstream had reported.
However, Dana Gas subsequently in April “terminated its agreement for the sale of its Egyptian assets to IPR as the parties were unable to complete a number of conditions precedent to the transaction by the long-stop date of 14 April 2021", the UAE player claimed.
“Dana Gas’ board of directors, therefore, decided to terminate the SPA [sales and purchase agreement] and retain and operate the assets in Egypt,” it said.
The company added that the arbitration was initiated by IPR Wastani Petroleum — part of the IPR Energy group — following termination of the SPA in April.
“The Tribunal rejected IPR Wastani’s claim in its entirety. The Tribunal ruled in Dana Gas’ favour on all key points, concluding that Dana Gas’ termination of the SPA was valid,” the company said.
Patrick Allman-Ward, chief executive of Dana Gas said the “award confirms that Dana Gas was correct and within its contractual rights to terminate the sale’s process".
“The board has made a decision to continue to hold and operate the assets in the best interests of the company and its shareholders as well as for our broader stakeholders,” he added.
Block 6 potential
Allman-Ward said that, in addition to its onshore assets in Egypt, the company is ‘excited about the potential of its offshore Block 6 Concession Area, where it is working to drill an exploration well “as soon as practicably possible".
Drilling is currently scheduled for the first quarter of 2022 depending upon the availability of long lead items.
The Block 6 Concession Area offshore Egypt “is estimated to contain more than 20 trillion cubic feet of gas resources", the company claimed.
The assets under the touted IPR Energy deal included Dana’s 100% working interests in the El Manzala, West El Manzala, West El Qantara and North El Salhiya onshore concessions and associated development leases that are said to be pumping around 30,000 barrels of oil equivalent per day.