Dana Gas, the Middle East’s regional private sector natural gas company, announced that it has signed an agreement for the North El Arish (Block 6) concession area, offshore the eastern Nile Delta. The 2,980km² block was awarded in April 2013 as part of a competitive bidding process.

This is the company’s first offshore block in Egypt, covering water depths from 20 up to a 1000m. Multiple play types have already been identified within the acreage and plans for the first exploration phase of four years, which has now commenced, includes seismic acquisition and the drilling of one exploration well.

The company is also pleased to announce the award of a new development lease, known as Balsam which is located in the West El Manzala Concession, Nile Delta region. The lease, which is 32km² brings the number of current leases to thirteen. Alongside the award of Balsam, Dana Gas has secured an 18 sq. km increase at its El Basant and Sama Development Leases in West El Manzala and West Al Qantara Concessions respectively.

These extensions bring the full extent of the Allium-1 and West Sama-1 well discoveries, made in H2 2012, within development leases awarded to Dana Gas. Dana Gas has filed development plans for these leases and the fields can be brought on-stream very rapidly given Dana Gas’ comprehensive gas pipeline network and processing plants across its operating area.

Patrick Allman-Ward, chief executive officer, said: "We are very pleased to have signed the North El Arish Concession Agreement. We consider this Block to be highly prospective and it forms an important part of Dana Gas’ growth portfolio. Dana Gas remains fully committed to developing the natural gas industry in Egypt, and we are extremely optimistic about the future. We are continuing with constructive dialogue with the Egyptian Government in order to further reduce the outstanding receivables as soon as possible."

Mark Fenton general manager, Dana Gas Egypt, added: "The award of these development leases containing the Balsam, Allium and West Sama discoveries has allowed us to strengthen our position in the key gas rich Nile Delta region. These discoveries, together with prior discoveries such as the South Abu El Naga and Salma-Tulip Fields which have been brought on stream in 2013, create development opportunities that underpin our plans for sustained production growth in Egypt."

In line with the scheduled review periods enshrined in the Development Lease agreements the West El Manzala Development Lease has been reviewed and reduced from 313 sq. km to 130 sq. km. In addition, the Ward Development Lease (30 sq. km) has been relinquished as the Company considers its remaining prospectivity to be limited. Dana Gas is still in discussions with the government concerning the award of a development lease over its Begonia exploration discovery made early 2013.