Dana Gas Kurdistan Production Falls

RECEIVABLES AND COLLECTIONS

Dana Gas's share of collections in the Kurdistan Region of Iraq during the quarter was $18 million (AED 66 million); a realisation of 95%. Trade receivable balance at the quarter end was $733 million (AED 2.7 billion); an increase of 1%.

Pearl Petroleum and the KRG's Ministry of Natural Resources have come to a new arrangement to ensure gradual reduction of past receivables in addition to the ongoing payment in full for current liquids production.

ARBITRATION

Kurdistan Region of Iraq

On 27 November 2015 the Tribunal of the London Court of International Arbitration (LCIA) issued a Second Partial Final Award ordering the KRG to pay PPCL the sum of $1.963 billion for outstanding unpaid invoices for the produced condensate and LPG up to 30 June 2015. The Award is final, binding and internationally enforceable, it does not depend on further claims or counter-claims by the parties to the arbitration. Further damage claims by the Consortium and counter-claims by the KRG will be heard and determined at a final two week hearing now fixed for early September 2016.

Dr Patrick Allman-Ward, CEO of Dana Gas said:

"The beginning of the year has been encouraging, with a good collections rate in both Egypt and Kurdistan despite the low oil price during the quarter, which should further improve revenues now that oil prices are already higher. In Iraq's Kurdistan Region, we have resumed full local sales and entered into a new agreement with the Ministry of Natural Resources to receive regular monthly payments.

"Furthermore, both the Khor Mor and Chemchemal Fields have had their reserves certified and we are pleased to report proven and probable resources are close to 1 billion barrels of oil equivalent as Dana Gas' share, making these fields truly world class assets.

"Our operations in the UAE and Egypt are progressing well. In the UAE, we have commenced sales of gas from our Zora Gas Field in Sharjah. And in Egypt during the quarter we have drilled and / or completed six successful development wells (including Balsam-4) and a new exploration well. All were successful and encountered gas bearing reservoirs on or above expectation.

"Two of the wells are already tied back and are producing with the remainder anticipated in the next two quarters. This should further boost production and expected revenues, and we expect to reach production capacity of our gas plant before year end."

(Source: Dana Gas)