Dana Gas reviews latest drilling program in Egypt

CAIRO – 28 July 2019: The UAE-based Dana Gas Company announced Saturday completing the drilling operations at its deep-water Merak-1 well, located in 755 meters of water in the North El-Arish (Block 6) concession in Egypt.

The Emirati Company clarified that the well was drilled to a total depth of 3,890 meters and encountered 46 meters of sand in the Miocene objective interval but did not encounter commercial hydrocarbons, adding that the well is being plugged and abandoned.

“The well costs are expected to be below budget,” it noted.

According to the company, the block 6 concession area contains at least three other independent prospects with material resource potential that are unaffected by the Merak-1 well result.

“The block 6 concession area is located in the Eastern Mediterranean Basin where other world-class giant natural gas discoveries have been made in recent years,” it elaborated.

During the first half of 2019, Dana Gas produced 34.1 kboed from its operations in Egypt.

In February, the company announced it will begin drilling in an area it says could become Egypt’s next giant Mediterranean gas field, after seismic data pointed to reserves as large as 20 trillion cubic feet.

“If the geology works out the way that we think it will, then in the success case it could be a 4-6 trillion cubic feet gas reserve,” Dana Gas CEO Patrick Allman-Ward told Reuters previously.

By the beginning of July, Dana Gas announced receiving payments of $48 million from its operations in Egypt in June, WAN news agency reported.

These collections comprise $38 million in payments from the government (of which $30 million as Dana Gas' share of the industry payment) and $10 million from the sale of the second El Wastani condensate shipment in 2019.

The industry payment is part of the Egyptian government’s ongoing efforts to reduce its overdue receivables position to zero by the end of 2019.