Dana Gas PJSC (“Company”), the Middle East’s largest private sector regional natural gas company, announces total 2018 cash collections from operations in Egypt, the Kurdistan Region of Iraq and Sharjah in the UAE of US$324 million (AED 1.2 bn), which will support the company’s growth plans as well as stated dividend distribution policy.
Further to the collections from Egypt that were already announced, the Company reported that during Q4 2018, Pearl Petroleum Company Limited (‘Pearl Petroleum’) has received US$102 million (AED 374m) from condensate and LPG sales from the Khor Mor field in the Kurdistan Region of Iraq.
Dana Gas is a 35% shareholder in Pearl Petroleum and accordingly its share of such receipts by Pearl Petroleum is US$36 million (AED 132m). This brings total collections received by Pearl Petroleum for the year to date to US$322 million (AED 1.18bn) and to US$113 million (AED 414m) for Dana Gas’ share.
There are currently no overdue receivables from the company’s KRI operations with all payments fully up to date.
Dr Patrick Allman-Ward, CEO, Dana Gas, said:
“The overall cash collections from operations for the year is a positive achievement for Dana Gas and will support the company’s growth plans as well as dividend distribution potential. In the Kurdistan Region of Iraq, our joint operations have received all payments in full and on time, which gives confidence for our planned future investments to more than double production levels there within the next few years.”
Dana Gas recently announced that as a result of the ramp up of production from debottlenecking project in the KRI and the completion of the Balsam-8 well in Egypt, its group production reached 70,000 barrels of oil per day (boepd). This represents a significant increase compared to the Company’s 9M 2018 average of 62,250 boepd.
The expansion of the gas processing plant in the KRI consisted of a series of plant additions and modifications to de-bottleneck throughput, raising output capacity from 305 MMscf/d of natural gas to 400 MMscf/d, with over 15,000 barrels per day of condensate. This is expected to add up to $50 million (AED 183m) annually to the Company’s revenues without incurring any significant operational costs.
Pearl Petroleum is also undertaking a multi-well drilling programme at Khor Mor and Chemchemal, with expansion plans to progress and grow gas production by a further 500 MMscf/d and liquids production by a further 10-12,000 boepd over the coming three years. These are planned to be primarily funded by the sums set aside in the Settlement Agreement and from retained earnings from the expanded production streams and from third party financing arrangements, and are not expected to require cash injections from Dana Gas.
—Ends—
About Dana Gas
Dana Gas is the Middle East’s first and largest regional private sector natural gas Company established in December 2005 with a public listing on the Abu Dhabi Securities Exchange (ADX). It has exploration and production assets in Egypt, Kurdistan Region of Iraq (KRI) and UAE, with 2P reserves exceeding one billion boe and average production of 62,250 boepd in 9M 2018. With sizeable assets in Egypt, KRI and the UAE, and further plans for expansion, Dana Gas is playing an important role in the rapidly growing natural gas sector of the Middle East, North Africa and South Asia (MENASA) region. Visit: www.danagas.com
Communication & Investor Relations Contact
Mohammed Mubaideen
Head of Investor Relations
+971 6 519 4401
Investor.relations@danagas.com
Total payments from Egypt $88M (AED 322m) in Q4 and $199M (AED 729 million) year to date
Dana Gas PJSC (the “Company”), the Middle East’s largest regional private sector natural gas company, has received an additional payment of $44.3 million (AED 162.4m) in US dollars from its operations in Egypt yesterday. This payment is made up of an additional $35 million industry payment from the government and $9.3 million from the sale of 157,350 barrels of El Wastani condensate, with both payments in US dollars.
The Company has now received two payments worth an equivalent of $55 million (AED 202m) in December from the Egyptian government towards overdue receivables. The shipment of El Wastani condensate is the fifth shipment of condensate sales in 2018, resulting in total collections of $54million from condensate shipments from Egypt in 2018.
Total receipts from Egypt has reached $199 million (AED 729m) year to date compared to $164 million (AED 600m) in 2017, an increase of 21% year-on-year. The level of the Company’s receivables in Egypt are now at its lowest since 2011, though the Company is hoping for further improvement in payments so as to reduce the level to zero as agreed.
Dr Patrick Allman-Ward, CEO, Dana Gas, said:
“Receiving US$55 million in December from the Egyptian government is positive for Dana Gas as it enables us to complete our final preparations to drill our first offshore deepwater exploration well in the Block 6 North El Arish Concession Area early in 2019. This is the first of several high potential prospects in the block. We are encouraged by the government’s willingness to make payments against their outstanding receivables before the year-end and we hope this will carry through into 2019 to clear the outstanding balance entirely as per the agreement.”
The Company recently announced that as a result of the ramp up of production from debottlenecking project in the Kurdistan Region of Iraq and the completion of the Balsam-8 well in Egypt, its group production reached 70,000 barrels of oil per day (boepd). This represents a 12.4% increase compared to the Company’s 9M 2018 average of 62,250 boepd.
—Ends—
About Dana Gas
Dana Gas is the Middle East’s first and largest regional private sector natural gas Company established in December 2005 with a public listing on the Abu Dhabi Securities Exchange (ADX). It has exploration and production assets in Egypt, Kurdistan Region of Iraq (KRI) and UAE, with 2P reserves exceeding one billion boe and average production of 62,250 boepd in 9M 2018. With sizeable assets in Egypt, KRI and the UAE, and further plans for expansion, Dana Gas is playing an important role in the rapidly growing natural gas sector of the Middle East, North Africa and South Asia (MENASA) region. Visit: www.danagas.com
Communication & Investor Relations Contact
Mohammed Mubaideen
Head of Investor Relations
+971 6 519 4401
Investor.relations@danagas.com
Dana Gas PJSC (the “Company”), the Middle East’s largest regional private sector natural gas company, has received $20 million (AED 73m) from the Egyptian Government in Egyptian pounds. Total receipts from Egypt has reached $152 million for the year. The Company understands that a further payment is planned to be made in US$ before year-end.
Dr Patrick Allman-Ward, CEO, Dana Gas, said:
“We are encouraged by this latest payment and we are looking forward to further payments before year end which will enable Dana Gas to proceed with its plans to drill the Merak deepwater exploration well, one of several prospects in the Block 6 North El Arish Concession Area with high potential”.
The Company is currently focused on drilling its first deepwater exploration well in the North El Arish Offshore (Block 6) Concession area in 2019 and final preparations are underway. It recently completed the drilling of the Balsam-8 production well and has tied it into the pipeline network. The well was completed ahead of schedule and under budget, adding over 5,000 barrels of oil equivalent per day “boepd” to the Company’s output. Last week, the Company announced group production reached 70,000 boepd on the 19 November and has since been sustained above that level, representing a significant increase compared to the Company’s 9M 2018 average of 62,250 boepd.
—Ends—
About Dana Gas
Dana Gas is the Middle East’s first and largest regional private sector natural gas Company established in December 2005 with a public listing on the Abu Dhabi Securities Exchange (ADX). It has exploration and production assets in Egypt, Kurdistan Region of Iraq (KRI) and UAE, with 2P reserves exceeding one billion boe and average production of 62,250 boepd in 9M 2018. With sizeable assets in Egypt, KRI and the UAE, and further plans for expansion, Dana Gas is playing an important role in the rapidly growing natural gas sector of the Middle East, North Africa and South Asia (MENASA) region. Visit: www.danagas.com
Communication & Investor Relations Contact
Mohammed Mubaideen
Head of Investor Relations
+971 6 519 4401
Investor.relations@danagas.com
Dana Gas buys back Sukuk of approx. US$12 million
Dana Gas PJSC (“Dana Gas” or the “Company”) provides the following market update in connection with Dana Gas’s 4% Nile Delta Sukuk Ltd Certificates issued by Nile Delta Sukuk Ltd (“Issuer”).
The Company announces a buyback of approx. US$12 million of 4% Nile Delta Sukuk Ltd Certificates– Reg S (the “Sukuk”) of the Issuer in December 2018. These bought back Sukuk will be delivered to Bank of New York Mellon (“Principal Paying Agent”) in due course for effecting cancellation.
Post cancellation of the above, the total outstanding of the 4% Nile Delta Sukuk Ltd Certificates would be approx. US$404 million.
-END-
Communication & Investor Relations Contact
Mohammed Mubaideen
Head of Investor Relations
+971 6 519 4401
Investor.relations@danagas.com
Dana Gas PJSC (the “Company”), the Middle East’s largest regional private sector natural gas company, announces that as a result of the ramp up of production from its debottlenecking project in the Kurdistan region of Iraq, its group production reached 70,000 barrels of oil per day (boepd) on the 19 November and has since been sustained above that level.
The Company’s principal operations are in the Kurdistan Region of Iraq (KRI) and Egypt, where the drilling of the Balsam-8 well has also led to a sharp increase in overall production. Current group production, in excess of 70,000 boepd, represents a significant increase compared to the Company’s 9M 2018 average of 62,250 boepd.
Dr Patrick Allman-Ward, CEO, Dana Gas, said:
“Production in excess of 70,000 barrels oil equivalent per day is a great achievement for Dana Gas. At the start of the year, we planned a drilling programme in Egypt and a debottlenecking project in the KRI that would significantly increase production. We have successfully delivered both projects. The increase in production will help offset the lower realised hydrocarbon prices that have impacted the oil industry in the last quarter and support growth in our revenue and net profit figures for the full year 2018 and beyond. We remain excited about the long-term future of our world-class assets in the KRI. Further investment is underway to double current production to 900 MMscf/d over the coming three years, together with an increase in condensate to 36,000 bpd and LPG to 1200 MTpd.”
In the fourth quarter 2018, Dana Gas Egypt completed the drilling of the Balsam-8 well and tied it in to the network. The well was completed ahead of schedule and under budget, adding over 5,000 boepd to the Company’s output.
In the KRI, the Company announced a 30% increase in production capacity at the Khor Mor field, which it jointly operates on behalf of Pearl Petroleum. The expansion of the gas processing plant consisted of a series of plant additions and modifications to de-bottleneck throughput, raising output capacity from 305 MMscf/d of natural gas to 400 MMscf/d, with over 15,000 barrels per day of condensate. This is expected to add up to $50 million annually to the top line without incurring any additional operational costs.
The Company recently posted a strong set of quarterly financial results. 9M 2018 revenue increased 6% to $351 million (AED1,287 mm) from $330 million (AED1,210 mm) over the same period last year and 9M 2018 net profit was $41 million (AED149 mm) versus a net loss of $6 million (AED22 mm) in 9M 2017, excluding one-off items.
—Ends—
About Dana Gas
Dana Gas is the Middle East’s first and largest regional private sector natural gas Company established in December 2005 with a public listing on the Abu Dhabi Securities Exchange (ADX). It has exploration and production assets in Egypt, Kurdistan Region of Iraq (KRI) and UAE, with 2P reserves exceeding one billion boe and average production of 62,250 boepd in 9M 2018. With sizeable assets in Egypt, KRI and the UAE, and further plans for expansion, Dana Gas is playing an important role in the rapidly growing natural gas sector of the Middle East, North Africa and South Asia (MENASA) region. Visit: www.danagas.com
Communication & Investor Relations Contact
Mohammed Mubaideen
Head of Investor Relations
+971 6 519 4401
Investor.relations@danagas.com
Dana Gas PJSC (“Dana Gas” or the “Company”) provides the following market update in connection with Dana Gas’s 4% Nile Delta Sukuk Ltd Certificates issued by Nile Delta Sukuk Ltd (“Issuer”).
The Company announces a buyback of approx. US$14 million of 4% Nile Delta Sukuk Ltd Certificates– Reg S (the “Sukuk”) of the Issuer in November 2018. These bought back Sukuk will be delivered to Bank of New York Mellon (“Principal Paying Agent”) in due course for effecting cancellation.
Post cancellation of the above, the total outstanding of the 4% Nile Delta Sukuk Ltd Certificates would be approx. US$416 million.
-END-
Communication & Investor Relations Contact
Mohammed Mubaideen
Head of Investor Relations
+971 6 519 4401
Investor.relations@danagas.com
Dana Gas PJSC (the “Company”), the Middle East’s largest regional private sector natural gas company, today announced its financial results for the third quarter ended 30 September 2018.
Highlights
Financial Results For 9M & Q3 2018
The Company’s 9M 2018 revenue increased 6% to $351 million (AED1,287 mm) from $330 million (AED1,210 mm) over the same period last year. Correspondingly, Q3 2018 revenue increased 6% to $115 million (AED422 mm) from $108 million (AED396 mm). The increase in revenue, driven by higher realised hydrocarbon prices, helped offset production decreases in Egypt and the UAE.
Gross profit for 9M 2018 was 31% higher at $113 million (AED413 mm), compared to $86 million (AED316 mm) in the corresponding period last year, driven by improved price realisations.
The Company’s 9M 2018 net profit was $41 million (AED149 mm) versus $125 million (AED458 mm) in 9M 2017. However, 2017 net profit included one-off income (non-cash) arising from entitlement adjustments ($114 million; AED418 mm) following settlement with the Kurdistan Regional Government (“KRG”) and interest on overdue receivables due from the KRG ($17 million; AED62 mm). Excluding these one-off items, net profit was $41 million (AED149 mm) in 9M 2018 as compared to a net loss of $6 million (AED22 mm) in 9M 2017.
The Company’s Q3 2018 net profit was $17 million (AED61 mm) versus $102 million (AED375 mm) in Q3 2017. Similar to 9M, Q3 2017 net profit included one-off income arising from the same entitlement adjustment ($91 million; AED333 mm) and interest on overdue receivables ($5 million; AED18 mm). Excluding these one-off items, net profit was $17 million (AED61 mm) in Q3 2018 as compared to $6 million (AED22 mm) in Q3 2017.
Dr Patrick Allman-Ward, CEO of Dana Gas, said:
“Our robust financial results for 9M 2018 again reflects excellent performance. We posted a net profit of $41 million as opposed to a $6 million adjusted net loss in 2017. In the KRI, we are celebrating our 10th anniversary of operations in-country and the successful execution of the debottlenecking project that is targeting a 25% boost to output. We have a 10- year gas sales agreement with the KRG to supply and sell these additional quantities of gas into the local market for power generation, which will further provide affordable and clean energy to underpin the region’s economic growth and additional revenues for Dana Gas.”
Liquidity and Collections
The Company’s cash position as of 30 September 2018 was $434 million (AED1,591 mm) compared to $608 million (AED2,229 mm) as of 31 December 2017. The decrease reflects the completion of the Sukuk restructuring, during which there was a $235 million (AED861 mm) payment in respect of principal, accrued profit, consent fees and Adhoc committee cost. In addition, a dividend payment of $95 million (AED348 mm) was made to shareholders in May.
The Group collected a total of $197 million (AED722 mm) during the period with Egypt, KRI and UAE contributing $111 million (AED407 mm), $77 million (AED282 mm) and $9 million (AED33 mm), respectively.
Subsequent to period end, the Company successfully bought back $100 million (AED367 mm) of its Sukuk consistent with the terms of the agreed Sukuk refinancing programme, reducing the outstanding Sukuk to $430 million (AED1,576 mm). This buyback will save the Company an additional $4 million (AED15 mm) in finance cost per annum. During 9M 2018, the Company reduced its finance costs by 44% to $31 million (AED114 mm) from $55 million (AED202 mm) in the same period last year.
Production
Group production during 9M 2018 averaged 62,250 boepd versus 67,600 boepd in 9M 2017. The decrease was due to lower output from Egypt and the UAE. In Egypt, production during 9M 2018 averaged 34,500 boepd versus 39,600 boepd in 9M 2017. This decrease is attributed to natural well declines and reduced investment in drilling activity. Subsequent to period end, the Balsam 8 well was completed and tied in ahead of schedule and under budget adding over 5,000 boepd to the Company’s output. Preparations are on track to drill the Company’s first deepwater offshore exploration well in Egypt’s Block 6, with the drilling date set for the beginning of 2019. In the KRI, 9M 2018 average production was steady year-on-year at 25,800 boepd.
—Ends—
About Dana Gas
Dana Gas is the Middle East’s first and largest regional private sector natural gas Company established in December 2005 with a public listing on the Abu Dhabi Securities Exchange (ADX). It has exploration and production assets in Egypt, Kurdistan Region of Iraq (KRI) and UAE, with 2P reserves exceeding one billion boe and average production of 67,600 boepd in 2017. With sizeable assets in Egypt, KRI and the UAE, and further plans for expansion, Dana Gas is playing an important role in the rapidly growing natural gas sector of the Middle East, North Africa and South Asia (MENASA) region. Visit: www.danagas.com
Communication & Investor Relations Contact
Mohammed Mubaideen
Head of Investor Relations
+971 6 519 4401
Investor.relations@danagas.com
Dana Gas PJSC (“Company”), the Middle East’s largest regional private sector natural gas company, is pleased to announce the appointment of Mr. Jassim Alseddiqi as a member of the Company’s Board of Directors, effective today. Mr. Alseddiqi’s appointment comes following the resignation of Mr. Adel Al-Awadhi from the Company’s Board.
Mr. Alseddiqi is the Chief Executive Officer of ADFG, a leading global investment group. Mr. Alseddiqi is also the Chairman of SHUAA Capital, GFH Financial Group, Eshraq Properties and Khaleeji Commercial Bank. He also serves on the boards of First Abu Dhabi Bank (FAB) and ADNOC Distribution.
Hamid Jafar, Chairman of Dana Gas, said:
“On behalf of the Dana Gas Board of Directors, I would like to express gratitude to Mr. Adel Alawadhi for his counsel and service to the Board and the Company. We wish him all the best in his future endeavours. We would also like to welcome Mr. Jassim Alseddiqi to the Board and are confident that his qualifications and experience will add significant value for the Company and its shareholders.”
—Ends—
About Dana Gas
Dana Gas is the Middle East’s first and largest regional private sector natural gas Company established in December 2005 with a public listing on the Abu Dhabi Securities Exchange (ADX). It has exploration and production assets in Egypt, Kurdistan Region of Iraq (KRI) and UAE, with 2P reserves exceeding one billion boe and average production of 67,600 boepd in 2017. With sizeable assets in Egypt, KRI and the UAE, and further plans for expansion, Dana Gas is playing an important role in the rapidly growing natural gas sector of the Middle East, North Africa and South Asia (MENASA) region. Visit: www.danagas.com
Communication & Investor Relations Contact
Mohammed Mubaideen
Head of Investor Relations
+971 6 519 4401
Investor.relations@danagas.com
Expansion Plans Continue to Grow Gas and Liquids Production
Dana Gas PJSC (“Company”), the Middle East’s largest regional private sector natural gas company, has received a further $59.5 million (AED 218 mm) dividend payment from its joint venture operations in the Kurdistan Region of Iraq (“KRI”). This payment takes the total dividends received from those operations to AED 439 million ($119.7 mm) so far in 2018, with all payment received on time and no outstanding receivables.
The payment has been distributed as a dividend by Pearl Petroleum, the consortium jointly owned by Dana Gas (35%), Crescent Petroleum (35%) as well as OMV, MOL and RWE (10% each). The payment follows the release of $150 million out of the $400 million that was paid by the Kurdistan Regional Government to the partners under a Settlement Agreement reached in August 2017 and that was held in a Pearl Petroleum bank account pending financing for an expansion plan at the Khor Mor field. Financing has been part achieved from a term facility agreement for a $150 million (AED 550 mm) loan to Pearl Petroleum to fund the production expansions at Khor Mor.
In addition, a dividend distribution of $20 million was made to the Pearl Petroleum partners from payment for liquids (condensate and LPG) produced and sold in the KRI. In total therefore, Dana Gas received $59.5 million (AED 218 mm) as a dividend from Pearl Petroleum reflecting its equity share in the consortium.
“The consistent and timely payments received from our operations in the Kurdistan Region of Iraq gives us the confidence to continue investing and expanding our production. With our world class reserves in the Khor Mor and Chemchemal fields and growing market for natural gas, combined with higher energy prices worldwide, the outlook is very positive for continued growth and economic returns to shareholders,” said Dr. Patrick Allman-Ward, CEO of Dana Gas,
A multi-well drilling programme at Khor Mor and Chemchemal and a debottlenecking of existing processing facilities are currently under way, with expansion plans in progress to grow gas and liquids production by 25% later this year, and by a further 132% over the coming 3 years. These are planned to be primarily funded by the sums set aside in the Settlement Agreement and third party financing arrangements, and so are not expected to require further cash injections from Dana Gas.
–Ends—
About Dana Gas
Dana Gas is the Middle East’s first and largest regional private sector natural gas Company established in December 2005 with a public listing on the Abu Dhabi Securities Exchange (ADX). It has exploration and production assets in Egypt, Kurdistan Region of Iraq (KRI) and UAE, with 2P reserves exceeding one billion boe and average production of 67,600 boepd in 2017. With sizeable assets in Egypt, KRI and the UAE, and further plans for expansion, Dana Gas is playing an important role in the rapidly growing natural gas sector of the Middle East, North Africa and South Asia (MENASA) region. Visit: www.danagas.com
Communication & Investor Relations Contact
Mohammed Mubaideen
Head of Investor Relations
+971 6 519 4401
Investor.relations@danagas.com
Dana Gas PJSC (the “Company”), the Middle East’s largest private sector regional natural gas company, announces that during September 2018, Pearl Petroleum Company Limited (“Pearl Petroleum”) has received US$ 21.6 million (AED 79.2m) from the Kurdistan Regional Government (the “KRG”) in respect of condensate sales.
Dana Gas is a 35% shareholder in Pearl Petroleum and accordingly, its share of such receipts by Pearl Petroleum is US$ 7.6 million (AED 27.9m). This brings total collections received by Pearl Petroleum for the year to date to US$ 211 million (AED 773m) and to US$74 million (AED 271m) for Dana Gas’s share. As of today Pearl has no outstanding receivables in the KRI. All payments are up to date.
Dr Patrick Allman-Ward, CEO, Dana Gas, commented:
“The continued arrival of these payments on time provides both us and our partners with the confidence to push forward aggressively with our expansion plans. We are on track to bring on-stream the incremental gas from our debottlenecking project in the next few weeks. This will raise gas production by 25% when fully operational which is expected to add $50 million (DG share) annually to our bottom line and will further boost local power generation capacity.”
–Ends—
About Dana Gas
Dana Gas is the Middle East’s first and largest regional private sector natural gas Company established in December 2005 with a public listing on the Abu Dhabi Securities Exchange (ADX). It has exploration and production assets in Egypt, Kurdistan Region of Iraq (KRI) and UAE, with 2P reserves exceeding one billion boe and average production of 67,600 boepd in 2017. With sizeable assets in Egypt, KRI and the UAE, and further plans for expansion, Dana Gas is playing an important role in the rapidly growing natural gas sector of the Middle East, North Africa and South Asia (MENASA) region. Visit: www.danagas.com
Communication & Investor Relations Contact
Mohammed Mubaideen
Head of Investor Relations
+971 6 519 4401
ir@danagas.com
Dana Gas PJSC, (“Dana Gas” or the “Company”), the Middle East’s largest regional private sector natural gas company, is pleased to announce today that the issue of its new Sukuk has been completed and is now listed on Euronext Dublin (previously known as “Irish Stock Exchange”).
All legal proceedings have now been completely brought to an end by the parties to the Sukuk litigation in all jurisdictions. The discontinuance in both the UK and UAE courts was agreed by all the parties following the consensual agreement to restructure the Sukuk reached in May 2018 which received overwhelming approval from both Sukukholders and Dana Gas Shareholders.
The Company has paid $235 million on redemptions, profit payments and early participation fees. The size of new Sukuk is reduced to $530 million. It will have a three-year life, maturing in October 2020 and a new profit rate of 4% per annum. The reduced size of the instrument, relaxed dividend covenants and a lower profit will reduce Company’s annual finance cost by $35 million per annum or 63% and provides a strong improvement to the Company’s financial position and support for the Company’s planned annual dividend policy.
Dr Patrick Allman-Ward, CEO Dana Gas, commented:
“We are pleased to have completed the issuance and listing of our new Sukuk. The new sukuk represents a fair consensual deal for the benefit of all our stakeholders. It is a ringing endorsement that the overwhelming majority of Sukukholders chose to remain invested with the Company. The Company can now move forward with its exploration and development plans to evaluate and develop its world-class portfolio of assets, both in the Kurdistan Region of Iraq and Egypt.”
-ENDS-
About Dana Gas
Dana Gas is the Middle East’s first and largest regional private sector natural gas Company established in December 2005 with a public listing on the Abu Dhabi Securities Exchange (ADX). It has exploration and production assets in Egypt, Kurdistan Region of Iraq (KRI) and UAE, with 2P reserves exceeding one billion boe and average production of 67,600 boepd in 2017. With sizeable assets in Egypt, KRI and the UAE, and further plans for expansion, Dana Gas is playing an important role in the rapidly growing natural gas sector of the Middle East, North Africa and South Asia (MENASA) region. Visit: www.danagas.com
For media enquiries please contact:
Jade Mamarbachi / Rupert Young
Brunswick Gulf
Tel: +971 4 560 9600
Email: danagas@brunswickgroup.com
Mohammed Mubaideen
Head of Investor Relations
Dana Gas PJSC
Mohammed.mubaideen@danagas.com
Tel +971 6519 4401
Cautionary Note Regarding Forward-Looking Statements and Other Disclaimers
This press release contains forward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms “believes,” “estimates,” “anticipates,” “expects,” “intends,” “may,” “will” or “should” or, in each case, their negative, or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this press release and include statements regarding our intentions, beliefs or current expectations concerning, among other things, the Transaction.
All forward-looking statements attributable to us are expressly qualified in their entirety by these cautionary statements. We undertake no obligation to publicly update or publicly revise any forward-looking statements, whether as a result of new information, future events or otherwise. All subsequent written and oral forward-looking statements attributable to us or to persons acting on our behalf are expressly qualified in their entirety by the cautionary statements referred to above and contained elsewhere in this press release.
Under no circumstances shall this announcement constitute an offer to sell, or the solicitation of an offer to buy, any securities nor shall there be any sale of the securities mentioned in this press release in any jurisdiction in which such offer, solicitation or sale would be unlawful. The potential Transaction described in this announcement and the distribution of this announcement and other information in connection with the potential transaction in certain jurisdictions may be restricted by law and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Information regarding the potential Transaction and the securities shall be contained in a tender offer and consent solicitation memorandum that may be produced by Dana Gas and/or the issuer of the securities and potential investors should refer to such offering document when, and if, it becomes available, and any decision by certificateholders regarding the proposed Transaction should be made after a careful evaluation of such tender offer and consent solicitation memorandum. Neither the issuer of any securities nor Dana Gas has registered, and does not intend to register, such securities in any jurisdiction and does not intend to conduct a public offering of such securities in any jurisdiction. In particular, no such securities of the Dana Gas or an issuer incorporated by Dana Gas have been nor will be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and such securities may not be offered, sold or delivered within the United States or to, or for the account or benefit of, U.S. persons (as defined in Regulation S under the Securities Act) except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.
Unanimous support for restructuring agreement
Dana Gas PJSC, (“Dana Gas” or the “Company”), the Middle East’s largest regional natural gas company, is pleased to announce that all shareholders present or by proxy (representing a quorate of over 62.3% of its shareholders) voted unanimously in favour of the consensual restructuring of its US$700 million Sukuk al-Mudarabah at today’s General Assembly Meeting.
This follows the previously announced consent for the restructuring terms from 90.9% of the 9% Ordinary Sukuk certificateholders and 96.4% of the 7% Exchangeable Sukuk certificateholders with none voting against, demonstrating overwhelming support for the transaction by all stakeholders.
The transaction represents an accretive and optimal outcome for all the parties, providing a satisfactory solution to the issues surrounding both the Company’s capital structure and the uncertain legal position of the sukuk.
Patrick Allman-Ward, CEO of Dana Gas, commented:
“We are delighted to have received the approval of all key stakeholders to complete the restructuring of our Sukuk al-Mudarabah, and to have had overwhelming support from both shareholders and certificateholders. The level of support underlines the consensual nature of the restructuring and the continued support of both sukukholders and shareholders of the Company is testimony to our financial strength and our exciting future growth prospects.
Dana Gas is well placed to deliver value for all stakeholders. We are making good progress in the Kurdistan Region of Iraq and are working hard to deliver a significant expansion program there this year. To this end we expect drilling to commence soon in both our world-class fields and debottlenecking work is underway to expand our output by 20% in the fourth quarter 2018. In Egypt, we recently received a payment of $40 million from the government which will allow us to proceed with drilling further onshore wells to increase production to plant capacity.”
-ENDS-
About Dana Gas
Dana Gas is the Middle East’s first and largest regional private sector natural gas Company established in December 2005 with a public listing on the Abu Dhabi Securities Exchange (ADX). It has exploration and production assets in Egypt, Kurdistan Region of Iraq (KRI) and UAE, with 2P reserves exceeding one billion boe and average production of 67,600 boepd in 2017. With sizeable assets in Egypt, KRI and the UAE, and further plans for expansion, Dana Gas is playing an important role in the rapidly growing natural gas sector of the Middle East, North Africa and South Asia (MENASA) region. Visit: www.danagas.com
For media enquiries please contact:
Jonathan Glass / Fiona Micallef Eynaud
Brunswick Group LLP
Tel: +442074045959
Email: danagas@brunswickgroup.com
Mohammed Mubaideen
Head of Investor Relations
Dana Gas PJSC
Mohammed.mubaideen@danagas.com
Tel +97165194401
Dana Gas PJSC, (“Dana Gas” or the “Company”), the Middle East’s largest regional natural gas company, is today pleased to announce that following the launch of Tender Offer and Consent Solicitation / Exchange Offer on 22nd May 2018 to consider approval for the terms and conditions of an offer for the restructuring and refinancing of its Sukuk Al-Mudarabah, the Sukuk certificateholders have overwhelmingly approved the transaction.
As of 1st June 2018 (“early participation fee deadline”), the Company received consent from 90.93% of 9% Ordinary Sukuk certificateholders and 96.45% of 7% Exchangeable Sukuk certificateholders with none voting against. The 75% threshold requirement for approval is therefore exceeded. This also means that an approval at the extra-ordinary general meeting of Sukuk certificateholders to be held on 13th June 2018 would be a formality.
The Company will continue to update the market with more details as to the Tender Offer and Consent Solicitation / Exchange Offer once the notice period expires.
Patrick Allman-Ward, CEO of Dana Gas, commented:
“We are extremely pleased to have received consent from an overwhelming majority of Sukuk certificateholders thus confirming the Company’s belief that the proposed terms of the deal was fair and in the best interests of all. All Sukuk certificateholders had the opportunity to elect to continue as holders of Dana Gas new Sukuk Certificates or exit via the tender, with 96.7% electing to remain as Sukuk certificate holders of Dana Gas.”
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About Dana Gas
Dana Gas is the Middle East’s first and largest regional private sector natural gas Company established in December 2005 with a public listing on the Abu Dhabi Securities Exchange (ADX). It has exploration and production assets in Egypt, Kurdistan Region of Iraq (KRI) and UAE, with 2P reserves exceeding one billion boe and average production of 67,600 boepd in 2017. With sizeable assets in Egypt, KRI and the UAE, and further plans for expansion, Dana Gas is playing an important role in the rapidly growing natural gas sector of the Middle East, North Africa and South Asia (MENASA) region. Visit: www.danagas.com
For media enquiries please contact:
Jonathan Glass / Fiona Micallef Eynaud
Brunswick Group LLP
Tel: +442074045959
Email: danagas@brunswickgroup.com
Mohammed Mubaideen
Head of Investor Relations
Dana Gas PJSC
Mohammed.mubaideen@danagas.com
Tel +97165194401
Cautionary Note Regarding Forward-Looking Statements and Other Disclaimers
This press release contains forward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms “believes,” “estimates,” “anticipates,” “expects,” “intends,” “may,” “will” or “should” or, in each case, their negative, or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this press release and include statements regarding our intentions, beliefs or current expectations concerning, among other things, the Transaction.
All forward-looking statements attributable to us are expressly qualified in their entirety by these cautionary statements. We undertake no obligation to publicly update or publicly revise any forward-looking statements, whether as a result of new information, future events or otherwise. All subsequent written and oral forward-looking statements attributable to us or to persons acting on our behalf are expressly qualified in their entirety by the cautionary statements referred to above and contained elsewhere in this press release.
Under no circumstances shall this announcement constitute an offer to sell, or the solicitation of an offer to buy, any securities nor shall there be any sale of the securities mentioned in this press release in any jurisdiction in which such offer, solicitation or sale would be unlawful. The potential Transaction described in this announcement and the distribution of this announcement and other information in connection with the potential transaction in certain jurisdictions may be restricted by law and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Information regarding the potential Transaction and the securities shall be contained in a tender offer and consent solicitation memorandum that may be produced by Dana Gas and/or the issuer of the securities and potential investors should refer to such offering document when, and if, it becomes available, and any decision by certificateholders regarding the proposed Transaction should be made after a careful evaluation of such tender offer and consent solicitation memorandum. Neither the issuer of any securities nor Dana Gas has registered, and does not intend to register, such securities in any jurisdiction and does not intend to conduct a public offering of such securities in any jurisdiction. In particular, no such securities of the Dana Gas or an issuer incorporated by Dana Gas have been nor will be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and such securities may not be offered, sold or delivered within the United States or to, or for the account or benefit of, U.S. persons (as defined in Regulation S under the Securities Act) except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.
Dana Gas PJSC (“Company”), the Middle East’s largest regional natural gas company, has received $40 million (AED 146.8m) from the Egyptian Government towards paying down its receivables. With this payment Dana Gas has received a total of $88.8 million (AED 325.9m) from Egypt during 2018.
Dr Patrick Allman-Ward, CEO, Dana Gas, said:
“We are pleased to have received this $40 million payment from the Egyptian Government which takes our total receipts to nearly $90 million for the first half of the year. It is a timely cash boost and highlights the Government’s publicly stated commitment to substantially reduce the petroleum companies’ receivables during 2018.”
“The monies will enable us to proceed with important growth initiatives such as drilling Balsam-8 in our Development Lease onshore the Nile Delta, which should provide incremental production to fill our onshore facilities to its capacity. Our primary focus remains on increasing production and on drilling our first offshore well in Block 6, due to commence in early 2019. Block-6 is highly prospective and contains several material prospects with multi-Tcf potential.”
Dana Gas first entered Egypt in 2007 and has become the fifth largest gas producer in the country. In Q1 2018, production was 36,800 boepd. It has title to 14 Development Leases, three exploration concessions and two processing plants. Its 2P reserves (as of YE 2017) stand at 117 mmboe.
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About Dana Gas
Dana Gas is the Middle East’s first and largest regional private sector natural gas Company established in December 2005 with a public listing on the Abu Dhabi Securities Exchange (ADX). It has exploration and production assets in Egypt, Kurdistan Region of Iraq (KRI) and UAE, with 2P reserves exceeding one billion boe and average production of 67,600 boepd in 2017. With sizeable assets in Egypt, KRI and the UAE, and further plans for expansion, Dana Gas is playing an important role in the rapidly growing natural gas sector of the Middle East, North Africa and South Asia (MENASA) region. Visit: www.danagas.com
Communication & Investor Relations Contact
Mohammed Mubaideen
Head of Investor Relations
+971 6 519 4401
Investor.relations@danagas.com
Dana Gas PJSC (“Company”), the Middle East’s largest regional natural gas company announces that it received a dividend payment of $22.75 million (AED 83.5m) from Pearl Petroleum Company Limited (‘Pearl Petroleum’) in proportion to the Company’s shareholding in Pearl Petroleum. This brings the total dividend payments received from Pearl Petroleum for the year to date to $36.75 million (AED 135m).
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About Dana Gas
Dana Gas is the Middle East’s first and largest regional private sector natural gas Company established in December 2005 with a public listing on the Abu Dhabi Securities Exchange (ADX). It has exploration and production assets in Egypt, Kurdistan Region of Iraq (KRI) and UAE, with 2P reserves exceeding one billion boe and average production of 67,600 boepd in 2017. With sizeable assets in Egypt, KRI and the UAE, and further plans for expansion, Dana Gas is playing an important role in the rapidly growing natural gas sector of the Middle East, North Africa and South Asia (MENASA) region. Visit: www.danagas.com
Communication & Investor Relations Contact
Mohammed Mubaideen
Head of Investor Relations
+971 6 519 4401
Investor.relations@danagas.com
DANA GAS RECORDS A 27% INCREASE IN NET PROFIT
Dana Gas PJSC (“Company”), the Middle East’s largest regional natural gas company today announced its financial results for the first quarter ended 31 March 2018.
Highlights
Dr. Patrick Allman-Ward, CEO of Dana Gas, said:
“The first quarter 2018 saw Dana Gas continue to perform solidly from both a financial and operational perspective. We have delivered a good set of financial numbers for the first quarter. We recorded a 27% increase in net profit and higher revenues reflecting higher realised prices. We continue to collect payments regularly in the KRI and our cash reserves increased further to $636 million. On the operations front, we signed a Gas Sales Agreement with the KRG for the incremental production from the debottlenecking project for which we have secured financing and are making good progress to increase our output by 20% this year. We have also submitted our field development plans to the Ministry of Natural Resources for the next phase of capacity expansion by 500 MMscf/d. The long-term, full potential of our world class assets in the KRI is very exciting. All in all, I am very pleased with the first quarter results.”
Financials
The Company reported first quarter 2018 gross revenue of $120 million (AED 440 million) as compared to $118 million (AED 432 million) in Q1 2017. The increase in revenue is the result of higher realised prices for condensate which contributed $12 million (AED 45 million) to our top-line; and helped offset a production decrease in Egypt and the UAE which impacted our top-line by $10 million (AED 37 million).
Net profit for the first quarter 2018 was $14 million (AED 51 million) as compared to USD 11 million (AED 40 million) in Q1 2017. This increase was mainly due to better realized prices and the reversal of accruals made by Pearl Petroleum for certain operating charges in prior years which are no longer required following the positive arbitration settlement with the Kurdistan Regional Government (KRG).
G&A and OPEX for the first quarter 2017 totalled $17 million (AED 62 million); similar to the fourth quarter 2017. This is slightly higher than the corresponding period as majority of the G&A cost was allocated to operating cost due to reduced CAPEX activity in Egypt during the period.
In the KRI the PPCL consortium is on track to increase production output by 20% this year and 170% by 2021. Although the Company will contribute $70 million (AED 257 million) towards capex (as part of its 35% shareholding) there will be no capital expenditure requirements on Dana Gas in 2018. All capex requirements will be satisfied from either the $400 million (AED 1.46 billion) development fund, operating cash flow or third-party financing. Capex requirements for 2018 will include plant debottlenecking, appraisal and development drilling and well workovers in the Khor Mor and Chemchemal Fields.
In March, Pearl Petroleum announced it had signed a ten-year Gas Sales Agreement with the KRG to supply and sell the additional quantities of gas produced from the debottlenecking project. This project has also secured $25.9 million in third-party financing. Furthermore, in the last four weeks, the Board of Pearl Petroleum has approved the Field Development Plan. This is now with the KRG’s Ministry of Natural Resources for their final approval.
The Company’s cash position was $636 million (AED 2.3 billion) as of 31 March 2018. In Egypt, the Company billed $32 million (AED 117 million) and collected $27 million (AED 99 million) in Q1 2018. This includes a $10 million (AED 37 million) industry payment and a condensate shipment sold for $ 10 million (AED 37 million) in late January. At the end of the first quarter, trade receivables grew by $6 million (AED 22 million) to $234 million (AED 858 million). Capital expenditure in Egypt was $7 million (AED 29 million) for the first quarter which includes part of the four-well activity programme started in the fourth quarter 2017. In the light of lower collections in Egypt than expected the Company is continuing to balance its investments against its collections. The Company’s capital investment plans for the remainder of the year will remain limited unless a significant payment is received from the Egyptian Government to reduce the receivables. In the KRI, the Company billed $29 million (AED 106 million) in the first quarter 2018 and the full amount was paid before end of April.
Production & Operations
Q1 2018 group average production decreased to 65,000 barrels of oil equivalent per day (boepd), down 7% from 69,900 boepd in Q1 2017. Egypt’s production was 10% lower at 36,800 boepd. KRI output was flat at 26,300 boepd vis-à-vis Q1 2017 and the UAE’s Zora Gas field produced 1,400 boepd in the first quarter as compared to 1,800 boepd in Q1 2017. The average realised condensate and LPG price in Q1 2018 was $57 boe and $33 boepd, as compared to $47 and $34, respectively, in the first quarter 2017.
In Egypt, the Company has drilled three wells and completed an extensive well workover which brings this phase of the drilling programme to a close. Two of the three wells have been successes. Economic assessment of the minimum recoverable volumes interpreted from the long Drill Stem Test suggests that the earlier ESAEN-1 exploration well in Block 1 is an economic development with a likely production potential of 5 MMscf/d. The last well, the SAEN-9 development well, was drilled, completed and successfully tested in April and will now be connected to the existing pipeline network with production of up to 5 MMscf/d expected to start at the end of the second quarter. The Company also undertook to workover a South Faraskur well, which resulted in an additional production of 4 MMscf/d. Regarding Block 6, progress is being made in terms of drilling the Company’s first offshore well in early 2019.
—Ends—
About Dana Gas
Dana Gas is the Middle East’s first and largest regional private sector natural gas Company established in December 2005 with a public listing on the Abu Dhabi Securities Exchange (ADX). It has exploration and production assets in Egypt, Kurdistan Region of Iraq (KRI) and UAE, with 2P reserves exceeding one billion boe and average production of 67,600 boepd in 2017. With sizeable assets in Egypt, KRI and the UAE, and further plans for expansion, Dana Gas is playing an important role in the rapidly growing natural gas sector of the Middle East, North Africa and South Asia (MENASA) region. Visit: www.danagas.com
Communication & Investor Relations Contact
Mohammed Mubaideen
Head of Investor Relations
+971 6 519 4401
Investor.relations@danagas.com
Dana Gas PJSC, (“Dana Gas” or the “Company”), the Middle East’s largest regional natural gas company, is today pleased to announce agreement with the Ad-Hoc committee of Sukukholders (the “AHC”) on terms and conditions of an offer for the restructuring and refinancing of its Sukuk Al-Mudarabah, the nominal value of which on 31 October 2017 was $700 million (the “Transaction”). As of today, Sukukholders representing in excess of 52% of the aggregate amount of the existing Exchangeable Certificates and in excess of 30% of the existing Ordinary Certificates have entered into a binding lock-up and standstill agreement with the Company in connection with the mutually agreed proposed restructuring. The Company and members of the AHC currently involved in litigation have also entered into a Litigation Dismissal Agreement that provides a mechanism for the dismissal of all pending litigation and a release of certain claims.
The consensual transaction represents a means to resolve amicably all current issues and disputes facing the parties.
Key Transaction Highlights
For holders wishing to exit their principal, the Company is offering an opportunity to tender their claims at 90.5¢ per $1 of the face value of their holdings, which includes an early participation fee of 2.5¢ (if elections are received within 7 days from the date of launch of the Tender Offer and Consent Solicitation process). (1)
For holders electing to receive a partial pay down and exchange into a new instrument, there is a path to full recovery including a significant repurchase obligation at par with respect to the new certificates. Such holders will also receive arrears of profit distribution as per the Existing Certificates up till 31 October 2017, and a 4% profit rate (see below) from 01 November 2017 till closing of the transaction. If elections are received within 7 days from the date of launch of the Tender Offer and Consent Solicitation process, holders will receive an early participation fee of 2.5¢
The new certificates will be constituted of a Wakala Sukuk instrument (based on an underlying Ijara and deferred payment obligation structure) which has a 4% profit rate and 3 year tenor (see appendix below).
The consensual agreement is contingent on various conditions being satisfied, including payment of costs of certain parties and termination of all current litigation, which has been value-eroding to all stakeholders, as well as a release of certain claims.
Dana Gas believes that the offer reflects the Company’s significantly improved financial position at about 0.3 times net leverage, and removes the risk to all parties of continuing lengthy legal disputes in multiple jurisdictions. The Board plans to secure the necessary stakeholder consents for the implementation of the Transaction, while the Company continues to focus on achieving its growth potential over the coming years and continue to realise increasing value of its assets. Dana Gas invites its shareholders and all the remaining Sukukholders to communicate their support of the Transaction as will be detailed in the tender offer and consent solicitation memorandum and shareholder notices that will be issued by the Company.
Patrick Allman-Ward, CEO of Dana Gas, commented:
“We are pleased to have amicably reached a consensual solution with the AHC, as indeed was always the Company’s publicly-declared intention from the outset, which offers Sukukholders the opportunity to cash out at a premium to current market prices or – individually solely at their election – to achieve a path to full repayment of the face value of their existing holdings. The proposed new Sukuk instrument to be issued to Sukukholders has been legally verified to be lawful without question.”
A member of the AHC also commented:
“We are now pleased to have reached an agreement with the Company and provide our support to the settlement.”
Next Steps
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About Dana Gas
Dana Gas is the Middle East’s first and largest regional private sector natural gas Company established in December 2005 with a public listing on the Abu Dhabi Securities Exchange (ADX). It has exploration and production assets in Egypt, Kurdistan Region of Iraq (KRI) and UAE, with 2P reserves exceeding one billion boe and average production of 67,600 boepd in 2017. With sizeable assets in Egypt, KRI and the UAE, and further plans for expansion, Dana Gas is playing an important role in the rapidly growing natural gas sector of the Middle East, North Africa and South Asia (MENASA) region. Visit: www.danagas.com
For media enquiries please contact:
Jonathan Glass / Fiona Micallef Eynaud
Brunswick Group LLP
Tel: +442074045959
Email: danagas@brunswickgroup.com
Mohammed Mubaideen
Head of Investor Relations, Dana Gas PJSC
Mohammed.mubaideen@danagas.com
Tel +97165194401
CautionaryNote Regarding Forward-Looking Statements and Other Disclaimers
This press release contains forward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms “believes,” “estimates,” “anticipates,” “expects,” “intends,” “may,” “will” or “should” or, in each case, their negative, or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this press release and include statements regarding our intentions, beliefs or current expectations concerning, among other things, the Transaction.
All forward-looking statements attributable to us are expressly qualified in their entirety by these cautionary statements. We undertake no obligation to publicly update or publicly revise any forward-looking statements, whether as a result of new information, future events or otherwise. All subsequent written and oral forward-looking statements attributable to us or to persons acting on our behalf are expressly qualified in their entirety by the cautionary statements referred to above and contained elsewhere in this press release.
Under no circumstances shall this announcement constitute an offer to sell, or the solicitation of an offer to buy, any securities nor shall there be any sale of the securities mentioned in this press release in any jurisdiction in which such offer, solicitation or sale would be unlawful. The potential Transaction described in this announcement and the distribution of this announcement and other information in connection with the potential transaction in certain jurisdictions may be restricted by law and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Information regarding the potential Transaction and the securities shall be contained in a tender offer and consent solicitation memorandum that may be produced by Dana Gas and/or the issuer of the securities and potential investors should refer to such offering document when, and if, it becomes available, and any decision by certificateholders regarding the proposed Transaction should be made after a careful evaluation of such tender offer and consent solicitation memorandum. Neither the issuer of any securities nor Dana Gas has registered, and does not intend to register, such securities in any jurisdiction and does not intend to conduct a public offering of such securities in any jurisdiction. In particular, no such securities of the Dana Gas or an issuer incorporated by Dana Gas have been nor will be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and such securities may not be offered, sold or delivered within the United States or to, or for the account or benefit of, U.S. persons (as defined in Regulation S under the Securities Act) except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.
Appendix I: Summary of Principal Deal Terms (2)
Sukukholders will be allocated (whether through election, allocation or scale-back) to either Option A or Option B (could be subject to pro-ration). The agreement requires approval from a requisite majority of holders of the existing certificates and the implementation of such consensual agreement will be subject to certain conditions being met, including all current and ongoing litigation proceedings being withdrawn and certain claims being released. All parties are required to take steps to withdraw ongoing litigation in Sharjah and the UK, as per the Litigation Dismissal Agreement that parties have entered into, which also includes provisions to the settlement of outstanding costs.
[1] This option is capped at 25% participation
[2] Details of the terms will be contained in the Tender Offer and Consent Solicitation Memorandum to be issued by the Company
[3] If elections are received within 7 days from the date of launch of the Tender Offer and Consent Solicitation process
Dana Gas PJSC (“Dana Gas” or the “Company”) provides the following market update details in connection with the ongoing legal dispute regarding the Company’s Sukuk Al Mudarabah.
As previously disclosed, the English Court issued on 4 April 2018 an interim order restraining the Company from declaring or distributing or paying a dividend to shareholders unless full provision is made by the Company for repayment of any obligations for which it may be liable under the Mudarabah Agreement and the Purchase Undertaking. Consequent to that order, the Company wrote to the Securities and Commodities Authority on 15 April 2018, seeking its approval to postpone consideration by the Company’s general assembly of shareholders of the previous directors’ dividend recommendation until the discharge of the injunction issued by the English Court. On 16 April 2018, the Security and Commodities Authority replied to the Company’s letter stating that the English Court order should be referred to UAE courts to determine its eligibility for enforcement in the State in accordance with Article 235 of the Civil Procedures law. The Securities and Commodities Authority further stated that it had no objection to postponing consideration of the dividend recommendation provided that the matter is duly explained to the general assembly and provided further that the general assembly approves postponement of the dividend recommendation.
Subsequently, on 16 April 2018, the Sharjah Federal Court of First Instance issued, upon an application by a Company shareholder, an order declaring the English Court interim order restraining the Company and its shareholders from declaring or paying a dividend unenforceable in the UAE until a UAE court determines its eligibility for enforcement in the State.
Upon being fully informed of the aforesaid developments, and against the Board’s subsequent revised recommendation to defer consideration of the dividend, the general assembly of shareholders held on 18 April 2018 voted in favor of declaring and distributing a 5% dividend, which was duly disclosed to the Market.
On 27 April 2018, the English Court rejected Dana Gas application to lift the said court’s dividend injunction and decided to extend its order of 4 April 2018 restraining the Company and its shareholders from declaring or paying a dividend, until the court determines the validity and enforceability of the Mudarabah Agreement (which is subject to UAE law) or until further order of the English Court, unless full provision is made by the Company for repayment of any obligations it may be liable to under the Mudarabah Agreement and the Purchase Undertaking.
The English Court reiterated its previous orders that the Company takes all steps within its power to cause the Sharjah proceedings and the injunctions issued in June 2017 and in March 2018, to be terminated.
As a result of these developments and in order to avoid violating the laws of the State, Dana Gas being a UAE company incorporated and listed in the UAE, or contravening the regulations of the Securities and Commodities Authority, which oblige the Company to deposit the divided amount resolved by the general assembly in the bank account of the Abu Dhabi Stock Exchange, on a specified date, in order to pay the divided to the shareholders within 30 days from the date of the general assembly’s resolution, the Company will pay the dividend into ADX account once advised to the Company by ADX. In the meantime, the Company will write to the Securities and Commodities Authority with respect to its previous request for postponement of payment of the dividend.
The Company will update the Market on the reply of the Securities and Commodities Authority once received.
Dana Gas PJSC (“Company”), the Middle East’s largest regional natural gas company, today held its 12th Annual General Meeting (AGM). The meeting was chaired by His Highness Sheikh Ahmed bin Sultan Al-Qasimi, Deputy Ruler of Sharjah and Honorary Chairman of Dana Gas. At the meeting its shareholders agreed to the Board of Directors’ recommendations for all the proposed resolutions, including the election of a new Board but excluding a Board recommendation and proposal to postpone the decision on the previously recommended 5% cash dividend payment.
With regard to the resolution for declaration and payment of the dividend, the Board, at its meeting on the 14 March 2018 had taken the position that in view of the Company’s strong cash position, the Company could afford to return some of that cash to shareholders in the form of a dividend of 5%. However, notwithstanding that the payment of the proposed dividend is permitted under the terms of the Sukuk, on 4 April 2018 one of the sukukholders obtained an ex parte injunction from the English court against the Company preventing the Company from declaring a dividend.
Under these circumstances the Company requested on 15 April 2018 guidance from the Securities and Commodities Authority of the UAE (SCA) which advised the Company that the English Court order restraining the Company from distributing a dividend should be referred to the UAE Courts to determine its eligibility for enforcement in the UAE. SCA has also advised the company that it has no objection to deferring the Board’s previously recommended resolution for a dividend at the AGM to a future date.
SCA’s response has been posted on the Dana Gas website. On the matter of the deferral of the consideration and resolution of the dividend item on the AGM agenda, SCA responded that it had no objection on condition that the shareholders at the meeting be made aware of the English Court injunction preventing the declaration of the dividend, and that a resolution put to shareholders to defer the dividend be passed by a simple majority. Such resolution was put to the shareholders but rejected by simple majority, subsequent to which the majority of shareholders proceeded to vote in favour of the declaration of a dividend, against the Board of Director’s specific reconsidered recommendation to the contrary.
And in recent development on 16 April 2018 the Sharjah Federal Court decided, upon an application by a shareholder of the Company, freezing the English Court Order until it is submitted to UAE Courts to determine its enforceability in the UAE.
The AGM concluded with the election of a new 11 member Board of Directors for the coming 3-year term. The new Board comprises Mr. Hamid Jafar, Mr Rashid Al-Jarwan, Mr. Majid Jafar, Mr. Varouj Nerguizian, Mr. Said Arrata, Mr. Abdullah Ali Al-Majdouie, Mr. Ziad Galadari and Mr. Hani Hussain being re-elected as Directors, and Mr. Shaheen Al-Muhairi, Mr. Adel Al-Awadhi and Mr. Nureddin Sehweil as new Directors.
The Chairman welcomed the new Directors and thanked the retiring board members HE Sheikh Sultan bin Ahmed Al-Qasimi, Mr. Nasser Al-Nowais and Mrs. Fatima Obaid Al-Jaber for their invaluable counsel to the Company during a challenging three-year period that included a lower oil price environment, cash collection delays, and arduous yet important arbitration cases, which thankfully have thus far been resolved in Dana Gas’s favour. Despite the difficulties, the Company produced a strong performance and 2017, in particular, saw some key achievements.
The most important of these is that after 4 years of negotiations and a further 4 years of arbitration proceedings, the Company was able to amicably resolve the outstanding contractual dispute with the Kurdistan Regional Government (KRG) with settlement terms that are favourable for all concerned. The current and long-term potential of the Khor Mor and Chemchemal giant fields in the Kurdistan Region of Iraq (KRI) is simply enormous, and the Company estimates that they hold in-place resources of 75 trillion cubic feet of gas and 7 billion barrels of oil. The Company is now looking forward with optimism as its focuses on contributing to the development of these world class assets. The targeted production increases are 20% this year and 170% within two to three years, with corresponding revenue increases of 45% and 260%. As such, the Consortium will be producing in total just under 900 million standard cubic feet of gas, 36,000 barrels of condensate, and 1,200 tons of LPG gross per day from the expanded facilities by 2021.
Dana Gas posted a strong financial performance in 2017, with full year gross revenues of $450 million, up 15% from 2016, and a net profit of $83 million. Group production rose to 67,600 barrels of oil equivalent per day (boepd), and the Company ended the year with a cash balance of $608 million, the highest in 10 years. The Company’s success is reflected in its strong recent share price performance.
Hamid Jafar, Chairman of Dana Gas, said:
“I am delighted to report that the Company resolved the outstanding contractual dispute with the KRG in August 2017. The settlement agreement is a major landmark for Dana Gas and all its partners and stakeholders. Despite all of the geopolitical and security challenges that we have faced, we have been producing from the region continuously for nine years, and our investment represents one of the largest and most successful private sector investments in the KRI and Iraq as a whole.
On behalf of the Board of Directors, I would also like to express my gratitude for the continued support of our Honorary Chairman, His Highness Sheikh Ahmed bin Sultan Al-Qasimi, and express my thanks to all my Board colleagues for their contribution over the last three years. I would also like to recognize the management team for their dedication and hard work which have been vital to the success of the Company. I welcome our new Board members and look forward to working with them to further enhance shareholder value in the years ahead.”
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About Dana Gas
Dana Gas is the Middle East’s first and largest regional private sector natural gas Company established in December 2005 with a public listing on the Abu Dhabi Securities Exchange (ADX). It has exploration and production assets in Egypt, Kurdistan Region of Iraq (KRI) and UAE, with 2P reserves exceeding one billion boe and average production of 67,600 boepd in 2017. With sizeable assets in Egypt, KRI and the UAE, and further plans for expansion, Dana Gas is playing an important role in the rapidly growing natural gas sector of the Middle East, North Africa and South Asia (MENASA) region. Visit: www.danagas.com
Communication & Investor Relations Contact
Mohammed Mubaideen
Head of Investor Relations
+971 6 519 4401
ir@danagas.com
Dana Gas had made many headlines since the Company stated its intention to refinance and to restructure its Sukuk in May of last year. Much of the story has been misunderstood (including in reports by the media) and the Company has received some negative headlines, egged on by the Ad hoc Committee of Sukuk holders (AHC) and their advisors, but the real complete story has now emerged which shows that the Company has been proved to be justified in taking the actions that it did, and that it will succeed with a successful outcome for all in many ways.
Al-Khaleej has investigated in detail and can now tell the full story properly.
Current position summary
The Sukuk restructuring process, that started nearly 1 year ago in accordance with normal industry practice, unfortunately later became mired in litigation between Dana Gas, the Sharjah based UAE publicly-listed company, and BlackRock, the world’s largest hedge fund and which is one of the international holders of the Company’s Mudarabah Sukuk. The Company sought, from the start, to agree a fair consensual solution with the Sukuk holders, but was evidently unnecessarily forced to defend itself and its assets on behalf of its shareholders.
There is, however, still an opportunity for a good outcome between the Company and its Sukuk holders. But the Sukuk holders do not appear to have time on their side as recent Orders by the UAE Federal courts require that the overriding UAE legal issues of the dispute must be determined in the UAE, and another hearing is scheduled on 4 April. These Orders, obtained through the intervention of outside Shareholders of the Company, could have very serious negative consequences for the Sukuk holders as we discuss below, so the parties/Sukuk holders would be well advised quickly to settle the matter amicably and consensually according to a source close to the Company.
How did it all start?
It was well known way back, including as early as 2016, that Dana Gas was owed hundreds of millions of dollars by various governments, including by Egypt (over $200 million of acknowledged debt), by the Kurdistan Regional Government (over $800 million (Dana Gas’s share) in unpaid invoices which were awarded by the international arbitration court), as well as billions of damages claimed against the KRG and Iran being adjudicated in international arbitration. “So it was obvious that the Company merely had a cash flow problem in meeting its debt obligations, which needed time and patience by creditors to resolve” said Christopher Hearne, Chief Financial Officer of Dana Gas, in a meeting with Al-Khaleej.
Hearne said that the Company in fact had initial preparatory contact with leading Sukuk holders including Blackrock as early as the summer of 2016 to brief and keep them advised of the situation with full transparency, and everyone fully understood and were supportive of the Company and understood its need to re-schedule if the cash flow problems continued, until payment by the governments concerned. At the meeting with Blackrock on 28 April 2017, the Company suggested to Blackrock to lead formation of an Ad Hoc Committee to discuss and negotiate the re-finance and re-structuring as is normal practice in the finance industry, which Blackrock agreed to and subsequently formed on 10th May 2017 together with Goldman Sachs following our press release on 3rd May 2017.Thus, formal contact started at the beginning of May 2017 (six months before the maturity date of the sukuk at end October 2017) to kick-off the process of re-structuring. However, at this stage, the committee did not include any holders from this region as part of the committee.
At the time, Dana Gas had cash liquidity issues and was facing the delay in payment of enormous amounts owed to it from the Egyptian Government and the Kurdistan Regional Government (KRG) but fully expected that such payments would happen in due course; The Company had made excellent progress, at that point in time, on its arbitration cases against the KRG and NIOC, the awards of which fully affirmed the Company’s disputed contractual rights as well as receivables owed by the KRG; so it was just facing a temporary cash flow problem. For example, the Company was then owed $265 million by the Egyptian government, who was well known to have economic problems and currency crisis, and needed more time to pay. Of even more significance was that Dana Gas was involved, as stated earlier, in an arbitration with the KRG over more than undisputed $700 million owed to the Company, as well as the billions of dollars claimed in the well-publicized arbitrations against the KRG and NIOC.
The Company formally approached the committee to discuss the two most important, although unconnected, issues: i) the refinancing and the need to give the Company more time to realise the amounts owed to it by the cited government; and ii) the unlawfulness of the Sukuk and replacing it with a new lawful Sukuk.
However surprisingly (and unlike previous and normal practice) the committee refused to even meet and instead, in a very unusual and hostile ill-advised step according to Houlihan Lokey, one of the leading international financial advisers specialising in debt restructuring, the Company received threatening letters and a draft default notice that would have greatly harmed both the Company’s ability to secure its outstanding cash receivables and realise the value of its enormously valuable assets; and negatively affecting all stakeholders including the Sukuk holders themselves. The Company acted (as it had to) immediately to protect itself and all its stakeholders, and sought injunctions to prevent this aggressive, unwarranted and dangerous action. Arun Reddy, managing director of Houlihan Lokey confirmed that this was an extraordinary move by the committee and recognised that the Company had no choice but to respond in order to protect itself and its assets.
By taking these preventative and protective actions, the Company secured/gained the necessary time to secure a very advantageous outcome for example from a settlement with the KRG in August 2017, from which Dana Gas received a large cash amount which greatly improved its cash position, as well as, it is now able to develop the huge oil and gas reserves it holds there. Dr Allman-Ward, CEO of Dana Gas, said in a recent interview that these could be worth $15 billion or more. All this could have been destroyed by the ill-advised actions of the AHC in May 2017 if left unchecked by the Company.
In addition, during 2017 the Egyptian Government Dana Gas was paid $110 million as part of the collection of the Company’s outstanding receivables.
The timeline:
Dana Gas was clearly proved right in its protective legal actions to secure injunctions [which incidentally were readily awarded by the courts not only of the UAE, but England and the BVI – which in itself was proof that the Company had a legal basis]: it saw a huge increase in the value of its assets worth billions of dollars and a strong improvement in its financial position with $608 million cash reserve by 31st December 2017. So much so that the Company is proposing at its AGM later this month to pay its first ever dividend. Further proof of the proper action by the Company, if needed, is the Company’s share price has more than doubled in this time.
Separately, and as part of the preparatory engagement with the BlackRock as early as 28 April 2017, the Company had also pointed out that as part of the due diligence process leading up to the restructuring, they had been informed by external legal advisers of UAE Law issues with respect to the lawful compliance of its existing Sukuk and that such issues were required to be addressed in a restructured lawful Sukuk. So it certainly was not a surprise to Blackrock.
Dana Gas first dividend
It seems that the Company now feels justified in paying a dividend following the successful settlement with the KRG which significantly improved its current cash and its future cash flow generation as well as progressively unlocking the billions of dollars of value there.
The Board can also now continue to recommend dividends in future years. The dividend policy could also be supported by the other large sources of funds available; for example the Company may benefit from the results and proceeds from the arbitration which its affiliate company, Crescent Petroleum, has won against the National Iran Oil Company, including the awaited monetary award.
Dana Gas has huge resources in the Kurdistan Region of Iraq, and is already funded to develop these assets with a clear path to future cash flows. Since the August 2017 settlement cited above, the KRG has been paying the Company on time every month for production, and is fully honouring the terms of the agreement. This is a great opportunity for Dana Gas and augurs well for a further large rise in the share price into the future that properly reflects the value of its world-scale assets.
Dana Gas has not damaged the Sukuk market
The Company had faced criticism from the committee of its Sukuk holders (which is a Mudaraba sukuk to a value of US$700 million) that its legal challenge was damaging the global Sukuk market in general. This is contrary to the unfolding reality of the sukuk market.
Hearne clarified that the reason for these criticisms was due to a failure to understand the sukuk Mudaraba structure, which is in fact strictly an equity financing structure (similar to a General Partner-Limited Partner structure in the West), and which for that misunderstood reason is now not used for a debt instrument except in less than 0.8% of worldwide sukuk bond issues.
Reddy said during the meeting with Al Khaleej that the international Sukuk issue market was busy with a growth of up to 40% in the volume of issues in the past year alone, in comparison with 2016, but pure structured issues (as in the case of the existing Dana Gas sukuk) were minimal.
A Mudaraba sukuk is similar to that of an equity contribution in a conventional equity financial transaction. The funds from the “rab al mal” who provides the funds for a project (i.e. the Sukuk holders) are used by the “mudarib” (i.e. the operator/manager of the project), (e.g. Dana Gas), to invest in a project that it will manage in consideration of receiving a specified share of the profits of the project, whilst the rab al mal will receive the balance of the profit from the project.
UAE Law implications for Sukuk holders
Al-Khaleej has again examined the issue properly. Article 704 of the UAE Civil Code provides that in the case of a Mudaraba transaction, it is the providers of the capital alone who will bear any losses, and that any provision to the contrary shall be void. The law also stipulates that in the event that any part of the capital in the mudaraba asset (i.e. project) is lost, then such loss shall be deducted from the profits, and in the event that the loss exceeds the profits, the difference shall be deducted from the capital, and the mudarib will not bear that loss or any part of that. Given its role as mudarib, i.e. as manager, it also is not permitted by law to guarantee a fixed rate of profit to be paid to rab al mal. These are all clear provisions of UAE law, which have been based on Shari’a principles concerning a mudarabah transaction.
Duncan Maclean, Legal and Commercial Director of the Company, said that the Sukuk capital was invested in oil and gas assets in Egypt, as the Dana Gas Sukuk documents clearly state. The value of these assets today is assessed to be approximately $500 million, and the total cumulative profits from the start (for the past 10 years) have been only about $60 million. Therefore the amount due to the sukuk holders should in fact be only $560 million. However, the Company has already made “on account” profit payments of $635 million to the sukuk holders. This means that the sukuk holders could, according to UAE law, be subject to an accounting reconciliation mandated by the UAE court, actually owe $75 million to the Company. This is the Company’s case.
In answer to a question about the high trading price of the Sukuk with the possibility of the sukuk holders being exposed to a total loss in the value of the sukuk, Hearne could not explain why they were trading at such levels.
Hearne said that in spite of all of that had happened, the Company was still determined to find a fair solution with the sukuk holders and he confirmed that Dana Gas had never, from the outset, had the intention to take advantage, in any way, despite the fact that they were confident that any court judgment, on the basis of the laws in force in the UAE and the fact that the sukuk umbrella agreement, the Mudaraba Agreement, was in accordance with UAE law, would be in their favour.
A fair deal structure proposed
Any settlement deal needs to be fair to the Company shareholders, as well as Sukuk holders as both parties in the end need to approve the deal if there is a settlement in preference to a litigation outcome.
Important for the Company and its Shareholders is that a new Sukuk would not have a conversion feature – this means that the Sukuk holders cannot exchange their Sukuk for Dana Gas shares. It is common for such conversion features to hold down the share price and market commentators believe that this has had such a dampening impact on the Dana Gas share price over the past several years.
Hearne said that any agreement would require the consent of all parties concerned including the Sukuk holders, the shareholders, and the Company’s Board of Directors, and in the event that the attempts at reaching a consensual settlement agreement satisfactory to all parties failed, there would be no option but to continue with the litigation and an ultimate legal result, which would almost certainly, pursuant to UAE law and if UAE law were properly applied (as is the Company’s legal case), cause a significant if not total loss of value to the Sukuk holders.
Hearne drew attention to the fact that with the passage of time and with some of the shareholders taking steps at that level, it was possible that this would gradually reduce the opportunities of reaching a consensual settlement of the dispute.
Al-Khaleej sought to ascertain the views of the sukuk holders on the background to the dispute and its unusual adversarial actions that nearly lost value for all concerned. It contacted Blackrock Company, which represents 25% of the sukuk, but it was unable to comment on any matter before the courts, which prevented it from commenting on the issue.
The legal story
The case of the restructuring of the Dana Gas sukuk is an ongoing story, which becomes more complicated as time goes on. The case is pending before the UAE Federal Court in Sharjah, and it is pending also before the English Court, which places the company in a very complex position, with conflicting orders made by the two courts.
At the beginning of this month, the UAE Federal court in Sharjah made judicial orders preventing the company from waiving or forfeiting or abandoning any judicial orders made in its favour, and preventing the Company from waiving, forfeiting or abandoning any judicial actions brought by it before the UAE courts.
The orders also provided that the Company was to continue with the proceedings in the action brought before the UAE court, and to submit all arguments such as to preserve the rights of the shareholders.
It also ordered a stay of execution of the judgments passed on 1 February 2018 by the English Court, and all decisions connected with it as against the Company and its shareholders, until the matter has been judged by the courts of the UAE. This judgment was made as a result of an intervention case brought before the Sharjah court by the shareholder Marwan John Shokri Kattan. A hearing was held on the 22nd March but as many of the parties representing the sukuk holders did not appear, the trial of the case was adjourned to 4th April.
At the beginning of last February, the English Court refused to cancel its judgment passed on 17 November 2017 in connection with the preliminary issues (in essence, the Purchase Undertaking which is part of the Mudaraba Agreement) that are subject to English law, in which it had declared the validity and effectiveness of that ancillary agreement (which forms one of the sukuk documents) in accordance with its own terms, as a matter of English law. That judgment was passed in the absence of Dana Gas, which was under an injunction at that time preventing it from defending itself. It must be noted that the Mudaraba Agreement is the umbrella agreement for the Sukuk and is governed by UAE law and is subject to the UAE jurisdiction.
The English judge also refused the application made by Dana Gas for the courts of the UAE to hear and determine issues that are subject to UAE law, relating to the legality and effectiveness of the mudaraba agreement, despite the fact that the mudaraba agreement is subject to UAE law and to the jurisdiction of the UAE courts. Mr Justice Leggatt passed a judgment contrary to that, saying that the English Court should hear and determine issues of UAE law relating to the mudaraba agreement, and not the Sharjah UAE Federal Court.
Mr Justice Leggatt also made an order that until such time as there was a settlement of the outstanding issues in dispute in those cases or the making of another order, the trustee of the Sukuk did not have the right, in the event that he received the exercise price or part thereof, to pay that amount or any part of it to the sukuk holders or to any of them, since if the subsequent/awaited reconciliation process took place in accordance with UAE law required a rebate, it would be practically impossible to recover monies from the many past and present sukuk holders.
By way of background the “Trustee” is only the entity that holds the Mudaraba assets in trust and the “Delegate” is the entity that may take legal action on behalf of the Sukuk holders. BlackRock in 2025 was allowed by the English court to have itself joined to the English proceedings following the injunction against the trustee and delegate.
He also made a final and permanent order restraining Dana Gas from proceeding with the actions pending before the Sharjah court, and he also ordered that the restraint order issued by the Sharjah UAE Federal Court be discharged and terminated, this being an order that restrains the trustee and the authorised security agent from taking any legal or executory step against the Company, notably in them declaring a Notice of Default, until such time as there was a final and irrevocable determination on the case.
Dana Gas had submitted an application to the English Court of Appeal for permission to appeal against those decisions. However, on the 20th March the English Court of Appeal refused the application to appeal, so the Company was denied a right to appeal.
Dana Gas is relying on the unlawfulness of the sukuk under the UAE Law which is underpinned by Islamic sharia principles. The Sharjah court was to have tried the action on 25 December 2017, but it was adjourned to 25 May 2018 because the Trustee and Delegate did not appear or acknowledge service.
On their part, the sukuk holders committee are relying on the purchase undertaking, which is subject to English law, but which however is an integral part of the umbrella mudaraba agreement. The sukuk holders committee take the view that the purchase undertaking does give them the right to recover their original investment despite provisions of the umbrella Agreement and genuine losses made by the Mudaraba assets. This is the final and important issue being currently tried.
The English Court passed judgment on 17 November 2017 declaring that the purchase undertaking agreement was valid and effective in accordance with its terms, as a matter of English law, but it stayed execution until the end of March 2018, and also decided that it would, at the beginning of May hear all of the details in dispute including matters of UAE law at a case management conference which would set the calendar for the case.
It should be mentioned that the court injunction obtained by the company from the Sharjah court in June 2017, which prohibits the taking of any enforcement action against it by the Delegate and the Trustee, is still in force and effect, and both the Delegate and Trustee have formally previously declared that they would respect the orders of the Sharjah UAE Federal Court.
Dana Gas PJSC (“Company”), the Middle East’s largest regional natural gas company announces that it received an amount of $14.4 million (AED 52.8 million) from Pearl Petroleum Company Limited (‘Pearl Petroleum’) for condensate and LPG sales in the Kurdistan Region of Iraq in Q1 2018. This amount does not includes the Company’s share of amounts received from the Kurdistan Regional Government and local traders and kept at Pearl Petroleum to cover operating costs and capex requirements.
—Ends—
About Dana Gas
Dana Gas is the Middle East’s first and largest regional private sector natural gas Company established in December 2005 with a public listing on the Abu Dhabi Securities Exchange (ADX). It has exploration and production assets in Egypt, Kurdistan Region of Iraq (KRI) and UAE, with 2P reserves exceeding one billion boe and average production of 67,600 boepd in 2017. With sizeable assets in Egypt, KRI and the UAE, and further plans for expansion, Dana Gas is playing an important role in the rapidly growing natural gas sector of the Middle East, North Africa and South Asia (MENASA) region. Visit: www.danagas.com
Communication & Investor Relations Contact
Mohammed Mubaideen
Head of Investor Relations
+971 6 519 4401
Investor.relations@danagas.com
Dana Gas PJSC (“Dana Gas” or the “Company”) provides the following market update in connection with the ongoing legal dispute regarding the Company’s Sukuk Al Mudarabah.
On the evening of 4 April 2018, the Company received notice of an Order for Interim Injunction and Interim Anti-Suit Injunction (“Order”) issued by the English High Court of Justice (“English Court”).
The Order was obtained by Putnam SPV 4 LLC (“Contrarian”), which is a special purpose vehicle incorporated in Delaware, USA and managed by Contrarian Capital Management LLC (“CCM”). This surprise Order was made and obtained by Contrarian on an ex parte basis (meaning that Dana Gas was not represented and without its advance knowledge). The Company plans to challenge the Order vigorously, and will claim any damage from Contrarian and any party assisting it (directly or indirectly) that Dana Gas and its shareholders may suffer consequent to it.
CCM is an investment advisor to various funds and managed accounts holding Certificates in the Company’s Sukuk Al Mudarabah, and transferred a number of Certificates from those funds to Contrarian for the specific purpose of applying to the English Court to obtain the Order and to be joined to the UK proceedings.
The English Court joined Contrarian as a party to the UK proceedings and made the Order. The Company has been ordered by the English Court to give notice of the Order to all shareholders by publishing the Order on the Company website and to disclose the Order on the Abu Dhabi Securities Exchange. A copy of the Order can be viewed by clicking this link.
The Company considers this requirement to give notice in this manner to be highly unusual and will be carefully reviewing the Order with its UK and UAE legal advisers.
The Order follows orders previously made by the Sharjah UAE Federal Court, at the request of a Dana Gas shareholder against BlackRock, the Trustee and the Delegate not to take any steps whether directly or indirectly against the Company or any of its shareholders in the UAE or UK on the grounds of the judgements of the English Courts in action FL-2017-000004 and orders or decisions connected therewith until those orders and decisions are submitted to the UAE judiciary for a determination on the enforceability thereof in the UAE pursuant to the provisions of Article 235 UAE Civil Procedures Law.
The Company is unaware whether steps have been taken by BlackRock, the Trustee or the Delegate to comply with the Sharjah UAE Federal Court order to submit the English Court judgements to the UAE judiciary.
The law firm representing Contrarian to obtain the Orders, Weil Gotshal & Manges (London) is the same law firm that is representing BlackRock before the English Court.
-ENDS-
Dana Gas PJSC (“Dana Gas” or the “Company”) provides the following market update in connection with the ongoing legal dispute regarding the Company’s Sukuk Al Mudarabah.
The Company announces that the English Court of Appeal on 20 March 2018 refused Dana Gas’ application to appeal the English High Court orders of Leggatt J. of 17 November 2017 and 1 February 2018.
Separately, on 7 and 8 March 2018, as a result of the intervention of a Company shareholder the Sharjah UAE Federal Court (“UAE Court”) recently issued orders to the Company:
The UAE Court has also joined BlackRock Global Allocation Fund (“BlackRock”) to the UAE proceedings and issued a new Anti-Suit injunction against BlackRock, the Delegate, Trustee and Security Agent preventing them
“…directly or indirectly from taking any proceedings against Dana Gas or its shareholders in the UAE and the United Kingdom on the ground of the British orders and judgements rendered in Case No. FL-000004-2017 [in England] and the related orders and rulings until these judgements and rulings are referred to the UAE judiciary to resolve their enforceability in the UAE, subject to Article 235 of the Civil Procedure Law.”
The UAE Court also issued orders to all parties to the UAE proceedings suspending the operation in the UAE of the 1 February 2018 orders of the English Court (“English Court orders”) until the UAE Courts determine their enforceability under UAE law.
Additionally, as BlackRock, the Delegate and Trustee failed to appear at the 22 March 2018 hearing, the UAE Court adjourned the main case to 4 April 2018 to allow the lawyers for the intervening shareholder to serve final notices on those parties. Separately, the Company on 23 March 2018 instructed its BVI lawyers to take steps in the BVI Court to have the BVI Injunction lifted. The BVI Injunction was originally granted in support of the original Sharjah UAE Federal Court injunction of 13 June 2017, which will however continue to remain in place restraining the Delegate and Trustee and Security Agent from taking any action while the recent orders of the Sharjah UAE Federal Court remain in place.
-END-
Enquiries please contact:
Jonathan Glass
Fiona Micallef Eynaud
Brunswick Group LLP
Tel: +442074045959
Email: danagas@brunswickgroup.com
About Dana Gas
Dana Gas is the Middle East’s first and largest regional private sector natural gas Company established in December 2005 with a public listing on the Abu Dhabi Securities Exchange (ADX). It has exploration and production assets in Egypt, Kurdistan Region of Iraq (KRI) and UAE, with 2P reserves exceeding one billion boe and average production of 67,600 boed in 2017. With sizeable assets in Egypt, KRI and the UAE, and further plans for expansion, Dana Gas is playing an important role in the rapidly growing natural gas sector of the Middle East, North Africa and South Asia (MENASA) region. Visit: www.danagas.com
10-year Gas Sales Agreement Signed between Pearl Petroleum and KR
Pearl Petroleum, the company consortium led by Crescent Petroleum and Dana Gas of the UAE, has signed a 10 year Gas Sales Agreement (GSA) with the Kurdistan Regional Government (KRG) to supply and sell the additional quantities of gas that it plans to begin producing later this year in order to boost much needed local domestic electricity generation.
The GSA was signed on 30th January 2018 by the KRG Minister of Natural Resources Dr. Ashti Hawrami, CEO of Crescent Petroleum Mr. Majid Jafar and CEO of Dana Gas Dr. Patrick Allman-Ward, to enable an increase in delivered gas production from the Khor Mor Field by an anticipated 80 million cubic feet of sales gas per day before the end of 2018, from the current level of 305 million cubic feet per day. All contractual conditions precedent for the agreement have since been satisfied and consequently the project work has now commenced.
In August last year, Pearl Petroleum reached a full and final settlement with the KRG of the arbitration between them, including receiving $1 billion in cash from the KRG for past receivables and committing to expand their investment and operations in the region. These expansion plans include a multi-well drilling program in both the Khor Mor & Chemchemal fields, as well as installation of additional gas processing and liquids extraction facilities. The fields are operated jointly by Crescent Petroleum and Dana Gas on behalf of Pearl Petroleum.
The initial phase of this expansion is through a fast-track debottlenecking project, whereby Pearl will increase daily production of natural gas and condensates from the Khor Mor Field by around 25% later this year which will deliver much needed gas to fuel additional affordable power generation for the benefit of the local population and Iraq as a whole. This accelerated debottlenecking project represents an important first step in the overall plan to increase gas production by a further 125% within 2 years after that to eventually reach around 900 million cubic feet per day of gas production, together with associated liquids.
Total investment to date exceeds $1.3 billion with total cumulative production over 228 million barrels of oil equivalent (boe), which has resulted in billions of dollars of fuel cost savings and economic benefits for the Kurdistan Region and Iraq as a whole. Operation full-time staff numbers are close to 500 with over 80% localisation, and training programmes to increase this figure further. In addition, Pearl has contributed to local communities with support for local power generation, education and healthcare facilities, as well as support programmes for internally displaced Iraqis.
Dana Gas has previously announced that the appraisal programme has to date resulted in proven certified reserves of 15 trillion cubic feet (tcf) of gas and 310 million barrels condensate.
Dr. Ashti Hawrami, Minister of Natural Resources of the Kurdistan Regional Government (KRG) said:
“The Kurdistan Region of Iraq holds potentially more than 200 tcf of gas and the KRG is committed to playing a positive role in the growing gas and electricity needs of Iraq and the region. We are pleased to see the further commitment of expansion and investment by the companies and the anticipated growth in gas supplies will make a positive contribution to the growing domestic needs for more electricity.”
Mr. Majid Jafar, CEO of Crescent Petroleum and Board Managing Director of Dana Gas, commented:
“The gas sales agreement marks an important milestone in our tenth year of continuous production, and the beginning of a new chapter of expansion in operations and production which will see a further investment of over $600 million over the coming few years and a more than doubling of production. The gas we have produced has led to significant fuel savings and social and economic value for the economy, and we hope to grow this in the years to come from the significant resources of these world class fields, for the benefit of the Kurdistan Region and all of Iraq.”
Dr. Patrick Allman-Ward, CEO of Dana Gas, added:
“We and our partners in Pearl Petroleum are proud to be the largest investors and producers in the gas sector of the Kurdistan Region. Despite all the challenges we have maintained our production levels and operations and now with the settlement of all past receivables last summer and continuous payments since then, we look forward to significantly growing production to meet the growing demand for gas and electricity in the Kurdistan Region and Iraq as a whole.”
Pearl has also implemented a corporate social responsibility program to support local communities, including providing school supplies, drinking water treatment, generators and fuel enabling 24-hour electricity for local villages, mobile medical units, and youth sports facilities, as well as financial support for 1,000 orphans from the Chemchemal area in partnership with a local charity Foundation. These initiatives are assisting the local communities in improving their standard of living, health, well-being, security and stability and the development of human capital.
Plans to increase production in KRI underway
Dana Gas PJSC (“Company”), the Middle East’s largest regional natural gas company today announced its audited financial results for the full year ended 31 December 2017.
Highlights:
The turnaround was led by higher realised liquid prices, higher production in Egypt and tight management of operational expenses. Higher profit was also supported by the successful settlement agreement (‘Settlement’) with the Kurdistan Regional Government (‘KRG’). However, Q4 net profit was impacted by an impairment charge of $34 million (AED 125m) against the UAE Zora asset following the year-end reserve report.
2017 group average production increased to 67,600 barrels of oil equivalent per day (boepd), up 1% from 67,050 boepd in 2016. Egypt annual production was 5% higher at 39,500 boepd. KRI production was flat at 25,750 boepd vis-à-vis 2016 and the UAE’s Zora Gas field produced 1,650 boepd in 2017 as compared to 2,700 boepd in 2016. The average realised liquid price was $40 per barrel of oil equivalent (boe), compared to $33 boe in 2016, a 21% increase in 2017. The group average production in Q4 2017 was lower at 67,350 boepd, compared to 69,450 boepd in 2016.
The year-end cash balance stood at $608 million (AED 2.23bn), double the $302 million (AED 1.1bn) reported at the end of 2016. This cash balance is largely a consequence of the $210 million (AED 770m) dividend received from Pearl Petroleum Company Ltd (‘Pearl Petroleum’ or the ‘Consortium’) as part of the Settlement, a $110 million (AED 403m) industry payment in Egypt and $22 million (AED 81m) of condensate export in Egypt. The cash balance does not include the $140 million (AED 513m) held by Pearl for the developmental of the Kurdistan Region of Iraq (‘KRI’) assets.
The Company kept costs and expenses to a minimum which resulted in a G&A spend of $15 million (AED 55m) and operational expenses of $52 million (AED 191m), totalling $67 million (AED 246m). This is in line with 2016’s $65 million (AED 239m) and is the fourth consecutive year of targeted cost reductions. The Company will carry-on focussing on cash conservation in 2018 as payments from Egypt remain uncertain and geopolitical risks in the region persist. Capital expenditure was $47 million (AED 172m) in 2017 and the projected spend in 2018 is $50 million (AED 183m) which includes completing the Egypt drilling programme and the KRI expansion plans.
Following the cash payment element of the Settlement Agreement and the reclassification of residual receivables, KRI’s trade receivables balance stood at $7 million (AED 26m) at year-end and represents the amounts due against local sales for the month of December 2017. In Egypt, the Company collected $164 million (AED 600m), which was 129% of billings. The total receivables balance fell to $228 million (AED 835m) from $265 million (AED 971m), a 14% drop.
The Company retains Gaffney Cline & Associates (‘GCA’) to independently evaluate and certify the hydrocarbon reserves at year-end. GCA evaluated KRI’s reserves at year-end 2015 at 990 MMboe and the fields remains some of the largest undeveloped resources in the Middle East. Following the 2017 review, Egypt’s proved and probable (2P) reserves were assessed at 117 MMboe as compared to 132 MMboe, lower on account of production during the year. The UAE’s 2P reserves were also revised downwards to 24 MMboe from 33 MMboe.
Dr. Patrick Allman-Ward, CEO of Dana Gas, said:
“Our settlement agreement with the Kurdistan Regional Government was a major milestone for the Company. This has allowed us to start to fully develop the Khor Mor and Chemchemal fields, two truly world-class gas fields, with in-place volumes of approx. 75 trillion cubic feet of wet gas and 7 billion barrels of oil, to the benefit of the people of the Kurdistan Region and all of Iraq. Our targeted production increases in the KRI are 20% this year and 170% in the next two to three years. The strength of our portfolio lies in organic growth and this will be our principal focus for 2018 and onwards. If all goes according to plan we will be producing, together with our partners in PEARL Petroleum just under 900 million standard cubic feet per day from our expanded facilities by 2021. We are also pleased to have qualified with the Iraq Oil Ministry for their upcoming bidding round as we seek to rejuvenate the Company’s opportunity portfolio.
We drove solid operational performance in 2017, which contributed to strong profitability, evidenced by a net profit of $83 million as compared to an $88 million loss in 2016. We continued to focus on cost efficiencies and managed to maintain our low levels of G&A, capex and operational expenditures in support of our capital conservation objective, and this focus will carry-on in 2018. Payments from Egypt in H2 2017 were sporadic and disappointing. We remain cautious about the timing and scale of future collections and so the dialogue with the Egyptian Government continues in order for us to get paid what we are contractually owed.”
Sukuk Restructuring
Advice received from independent legal advisers at the end of May 2017 stated that the terms of the Company’s Sukuk Al Mudarabah were not compliant with Shari’a principles and are unlawful under the laws of the UAE and therefore were void and unenforceable. The outcome of the ongoing litigation finally in UAE courts could result in a significant liability for the Sukukholders to repay the Company excess ‘on account profit payments’ based on a lawful reconciliation of the transaction. The Company, in line with detailed public disclosures that it has made to the Securities and Commodities Authority (SCA) and through ADX, is pursuing the litigation route to resolve the matter and is confident pursuant to independent legal advice of prevailing in its interpretation of the outcome.
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About Dana Gas
Dana Gas is the Middle East’s first and largest regional private sector natural gas Company established in December 2005 with a public listing on the Abu Dhabi Securities Exchange (ADX). It has exploration and production assets in Egypt, Kurdistan Region of Iraq (KRI) and UAE, with 2P reserves exceeding one billion boe and average production of 67,600 boepd in 2017. With sizeable assets in Egypt, KRI and the UAE, and further plans for expansion, Dana Gas is playing an important role in the rapidly growing natural gas sector of the Middle East, North Africa and South Asia (MENASA) region. Visit: www.danagas.com
Communication & Investor Relations Contact
Mohammed Mubaideen
Head of Investor Relations
+971 6 519 4401
Investor.relations@danagas.com
Dana Gas PJSC (“Dana Gas” or the “Company”) provides the following market update in connection with the ongoing legal dispute regarding the Company’s Sukuk Al Mudarabah. The Company has been served with orders from the Sharjah Court of First Instance relating to the ongoing legal proceedings in the UK and UAE relating to its Sukuk Al Mudarabah.
The Company has been:
“prohibited from discharging or withdrawing or abandoning any of the Orders issued in favor of the Company or the lawsuits instituted [by the Company] before the UAE Courts including lawsuit No. 3576/2017 Commercial Plenary; ordered to continue with the proceedings in the lawsuit No. 3376/2017 Commercial Plenary, and to submit all defenses in respect of protecting the interests of the plaintiff and all shareholders of the Second Defendant; and ordered to suspend the enforcement in the UAE of the judgements issued on 1 February 2018 by the English High Court of Justice in the lawsuit No. FL-2017-000004 and all decisions connected therewith made against the Second, Third, Seventh, Eighth, Ninth Defendants and all shareholders of the Second Defendant, pending referral of those judgements to the UAE Courts, pursuant to Article 235 of Civil Procedures Law, for determination of their eligibility for enforcement in the State.”
The orders also apply to the Company’s Board of Directors, BlackRock Global Allocation Fund, Deutsche Trustee Limited, Deutsche Bank AG (Abu Dhabi branch), Dana Gas Sukuk Limited, Khalid bin Abdulrahman Saleh Al-Rajhi, Al Manara Investment and Development Centre LLC and Al Midfa Investment Group LLC.
The orders have been issued by the Sharjah Court of First Instance at the request of the Plaintiff, Marwan John Shorkry Kattan, a shareholder in Dana Gas and were obtained on an ex parte basis.
The hearing to address these matters has been scheduled for the 22nd of March 2018.
The Company is currently seeking legal advice as to the implications of these Orders.
Copies of the orders will be available on the Company’s website
(official Arabic version plus unofficial translations by the Company).
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Enquiries please contact:
Jonathan Glass
Fiona Micallef Eynaud
Brunswick Group LLP
Tel: +442074045959
Email: danagas@brunswickgroup.com
About Dana Gas
Dana Gas is the Middle East’s first and largest regional private sector natural gas Company established in December 2005 with a public listing on the Abu Dhabi Securities Exchange (ADX). It has exploration and production assets in Egypt, Kurdistan Region of Iraq (KRI) and UAE, with 2P reserves exceeding one billion boe and average production of 67,600 boed in 2017. With sizeable assets in Egypt, KRI and the UAE, and further plans for expansion, Dana Gas is playing an important role in the rapidly growing natural gas sector of the Middle East, North Africa and South Asia (MENASA) region. Visit: www.danagas.com