Dana Gas has second Egypt find

Dana Gas, the Sharjah-based producer that is struggling to repay its debt, has struck gas in Egypt.

Dana Gas, the Sharjah-based producer, has struck gas in Egypt.

The company estimates that the reservoir it found in the Nile Delta holds up to 6 billion cubic feet of gas. It is the company's second find in Egypt this year.

"The well is an excellent start to 2012 drilling in the Nile Delta. We still have a sizeable portfolio of drillable prospects and our exploration activity will continue throughout the year, as will our development activities," said Patrick Allman-Ward, the general manager at Dana Gas in Egypt. The company is the sixth largest producer in Egypt.

Sluggish and insufficient payments in Egypt and in Kurdistan, home to Dana's primary production sites, have thrown the company's finances into turmoil. Questions have been raised over its ability to repay the principal of a US$1 billion (Dh3.67bn) sukuk that matures at the end of the month.

The sukuk is secured against assets in Egypt and the UAE, where Dana has pursued a pipeline project to import gas from Iran. Analysts said these assets were not valuable enough to force Dana's hand in the repayment negotiations. A recent announcement by the Kurdish Regional Government that about $1bn will be doled out as payments for oil and gas production has left investors encouraged that the company's finances will improve.

Dana's first-half net profit increased by 79 per cent on the year to Dh387 million.