ABU DHABI- United Arab Emirates-based energy firm Dana Gas will spend $47 million in Egypt this year but any new investments will be made only if the country pays some of the money it owes, Dana's chief executive said on Thursday.
Abu Dhabi-listed Dana has been struggling to recover payments from Egypt, with total "receivables" related to oil and gas production standing at $228 million.
“Capex (capital expenditure) of similar amount will be spent this year,” CEO Patrick Allman-Ward told reporters on a media call. The capex in 2017 was $47 million.
The money will go towards an ongoing drilling programme in Egypt where Dana has two to four wells and where work has already begun.
But with Egypt's payments in the second half of 2017 being “sporadic and disappointing”, Dana is cautious about new investments. “Absent payment, absent investments,” Allman-Ward said.
Dana's production in Egypt in 2017 was around 39,500 barrels of oil equivalent per day (boepd), up 5 percent year-on-year, it said in annual results on Thursday.
Dana swung to a net profit of $83 million in 2017 from a net loss of $88 million a year earlier, helped by a rise in revenues due to higher oil prices and higher production in Egypt and Kurdistan where Dana has its main assets.
The earnings also benefited from a settlement with the Kurdistan Regional Government (KRG) which agreed to pay $600 million in cash to the Pearl Petroleum Consortium, in which Dana and its affiliate Crescent own 70 percent and their other partners.
KRG also agreed to pay another $400 million to go exclusively towards Pearl’s further development to increase production at its fields.
Current production at Pearl’s Kurdistan fields is around 300 million standard cubic feet (scuf) per day of gas with plans to increase production by 20 percent this year and 170 percent in two to three years, Allman-Ward said.
He also said Dana had qualified with the Iraqi oil ministry for their upcoming bidding rounds for oil and gas exploration.
(Reporting By Stanley Carvalho. Editing by Jane Merriman) ((firstname.lastname@example.org; + 9712 6444431; Reuters Messaging: email@example.com))