UAE-based natural gas company Dana Gas has agreed to sell its onshore Egypt oil and gas assets to IPR Energy’s member IPR Wastani Petroleum for up to $236m.

The company said that the deal is the result of a comprehensive formal sales process which was initiated following a strategic review of its Egyptian business.

Under the terms of the binding agreement signed by both the companies, IPR Wastani Petroleum will be acquire Dana Gas’ 100% stakes in the El Manzala, West El Manzala, West El Qantara and North El Salhiya onshore concessions as well as the associated development leases.

Dana Gas CEO Patrick Allman-Ward said: “The sale of our Egyptian assets forms a key part of this strategy.

“Completion of the sale process will allow us to strengthen our balance sheet and focus our attention on the development of our world class assets in the KRI, of which our current share of reserves are over 1 billion barrels of oil equivalent, with considerably more resources for realization and development.”

The oil and gas assets reported production of 30,950 barrels of oil per day

Dana Gas said that the assets have produced 30,950 barrels of oil per day in the first half of the year.

It will retain its interests in onshore and offshore exploration concessions including El Matariya (Block 3) and North El Arish (Block 6), and will actively pursue maximizing the value of these assets.

The transaction includes $153m of base cash consideration and up to $83m contingent payments subject to average Brent prices and production performance between 2020-2023 and the realisation of third party business opportunities.

Subject to several conditions precedent and approval by the Egyptian Ministry of Petroleum and Mineral Resources, the deal is currently expected to be concluded early next year.

Earlier this year, Dana Gas has announced its plans to pursue a feasibility study to explore a possible demerger of its upstream business into a new company.