UAE's Dana Gas boosts Kurdish output by 7%, on track for 2023 expansion

UAE's Dana Gas boosted its output from Iraq's semi-autonomous Kurdistan region by 7% year on year during the first nine months of 2021 and is on track for first gas from the Khor Mor field expansion in April 2023, the company said Nov. 14.

Dana's output from Kurdistan rose to 34,000 boe/d, offsetting a 4% decline in Egypt production to 29,200 boe/d due to "natural field depletion," it said in the statement. Total average nine-month production was little changed at 63,200 boe/d.

Pearl Petroleum Co., the consortium led by Dana Gas and parent company Crescent Petroleum, signed a $250 million financing agreement with the US International Development Finance Corp. to help finance the ramp up of production at the Khor Mor gas plant by 50% to 690 MMcf/d, the two companies said in a Sept. 8 statement.

The $630 million project is the first stage of a two-train expansion plan at Khor Mor that targets ramping up total output to about 1 Bcf/d. Work on the first train for 250 MMcf/d resumed in April following COVID-19 related delays and the plant is expected to be completed by April 2023.

Negotiations over a sales gas agreement with interested parties for the second 250 MMcf/d are ongoing, CEO Patrick Allman-Ward said on a media call on Nov. 14.

"We hope they will be concluded as quickly as possible so that we can make a decision to continue with the second train," said Allman-Ward. "We hope that if that decision can be made in the next six months or so that will allow the contractor to be able to realize the benefits of scale and deliver the second train both cheaper and quicker than the first train."

Should plans for the second train go ahead, first gas from the second train may potentially come about 18 months after first gas from the first train, he added.

In black

In April 2007, Dana Gas and Crescent Petroleum entered into an agreement with the Kurdistan Regional Government for exclusive rights to appraise, develop, produce, market and sell petroleum and gas from the Khor Mor and Chemchemal fields in the region. The other shareholders in the Pearl consortium are OMV, MOL and RWE with a 10% stake each.

Dana Gas swung to a nine-month profit of $279 million from a $379 million loss in the year-earlier period.

"The steps the company has taken to increase production and reduce its cost structure and the progress it has made in increasing collections has well positioned Dana Gas to benefit from rising energy prices and create shareholder value," Allman-Ward said in the statement. "In Egypt, a five-well drilling program has been concluded and the additional production has almost entirely offset natural well declines."

In Egypt, the company expects to drill the deep-water Thuraya well in offshore Block 6, where the company estimates the field holds some 20 Tcf in potential resources.

"We are making progress to drill Thuraya as quickly as possible and the ultimate drill date will depend on our ability to secure a rig and the long lead times," Allman-Ward said on the media call.

"Optimistically, we would like that to be as early as possible, potentially as early as the beginning of the next year, but the market realities will dictate as exactly when we can be ready to drill that well."

Dana, which is 100% equity partner in Block 6, is looking for potential partners to share risk and costs, he added.