Dana Gas PJSC has today achieved an important milestone with the first international sale of condensate in Egypt under the Gas Production Enhancement Agreement (GPEA).
The first cargo is approximately 150,000 barrels of Wastani condensate and was loaded on 15 April 2017. The buyer has issued a letter of credit, and payment amounting US$ 7.2 million will be made to Dana Gas directly.
The cargo is the first to be directly exported by Dana Gas under the GPEA signed with the Egyptian government in August 2014. The cash proceeds generated from the government’s share of the incremental condensate sales will be used to start paying-down the outstanding receivables owed to Dana Gas by the Egyptian government.
Dr Patrick Allman-Ward, CEO, Dana Gas, said: “We are pleased to have sold our first international cargo under the GPEA agreement. It was a landmark win-win deal at the time and importantly the mechanism is shown to be working. We can now continue to directly sell and export condensate cargoes internationally. By maintaining our production rate of roughly 40,000 barrels of oil equivalent per day, we expect to sell three additional cargoes in the next 12 months.”
“The cash proceeds of US$7.2 million will be offset against our overdue receivables, which stand at US$289 million. However, collections of our overdue receivables in general remain well below our expectations. We are yet to receive a significant payment this year. We continue to engage with various government entities and we hope that the Egyptian government will resolve the situation favourably in the near future,” added Dr Allman-Ward.
In the first quarter 2017, collections in Egypt were US$13 million, representing 52 percent of total billings. Total receivable balance increased to US$289 million from US$265 million as of 31 December 2016. In Kurdistan, collections were US$31 million, representing just over 100 percent of total billings. Total receivable balance remains at US$713 million.