Shares in Dana Gas edged higher on Thursday, after the company announced that it has signed a long term contract with the Kurdish Regional Government (KRG) to enhance gas production in Khor Mor Field.
The company said in a statement to the Abu Dhabi exchange: “Pearl Petroleum Company Limited (“Pearl Petroleum”), the Consortium led by Crescent Petroleum and Dana Gas of the UAE, has signed a new 20-year Gas Sales Agreement (GSA) with the Kurdistan Regional Government to enable production and sales of an additional 250 MMscf/day (million standard cubic feet per day) that the Consortium aims to produce by 2021.”
In 2009, Pearl Petroleum was formed as a consortium, with Dana Gas and Crescent Petroleum as principal shareholders. They were subsequently joined by European energy firms OMV, MOL, and RWE, who each acquired a 10 percent stake in the company.
Gas production from Khor Mor Field will be increased by 63 percent within two years, according to the newly signed agreement.
The production from Khor Mor field will rise by 63 percent from 450MMscf/day to reach 650 MMscf/day by 2021, with plans to further raise it to 900 MMscf/day by 2022.
“This is indeed a game changer for Dana Gas and what makes it sweeter is the fact that Kurdish regional payments have been up to date. With cash flows assured, Dana Gas shareholders can hope for a good ride,” John added.
The company’s statement said that “all payments have been received in a timely manner in full”.
Dana Gas’s shares closed the session 0.46 percent higher on Thursday, despite rising more than 2 percent early in the session. The company’s shares have dropped 9.37 percent so far since the start of 2019.