Dana Gas, the Sharjah-based producer, has made two new gas discoveries in the Nile Delta basin.
Successful drilling at the two wells, located near existing Dana operations, will increase the company's proven reserves by at least 17 million barrels of oil equivalent (mboe), and could boost reserves by up to 95 mboe - a 55 per cent increase in the company's proven reserves.
"Our latest two discoveries confirm the Nile Delta as a prolific hydrocarbon-bearing basin," said Rashid Al Jarwan, the executive director and acting chief executive of Dana Gas. "Dana Gas remains fully-committed to the long term development of Egypt's gas industry and its essential role in fuelling the nation's economic growth."
The findings are welcome news to both company and country.
Dana Gas is faced with payment delays in both Egypt and Iraqi Kurdistan, its two key production sites. Insufficient receivables have forced it to refinance a US$1 billion sukuk in November.
Dana is the sixth largest gas producer in Egypt. While the company is now being paid for the gas it produces, the Egyptian government still owes it payments for gas delivered during the political upheavals in the past, Majid Jafar, the chief executive of Dana's parent company Crescent Petroleum said last month.
Meanwhile, Egypt is struggling to free up enough gas to fuel economic growth in the aftermath of the Arab Spring.
Producers such as Dana and Britain's BG Group have reported production declines this year. In spite of doubling its proven reserves over the past five years to over 70bn cubic feet, and being one of the 10 largest exporters of liquefied natural gas (LNG), the country is now turning to gas imports to meet its requirements.
Egypt is soliciting bids for an LNG import terminal that is to be operational as early as May next year, according to the Egyptian Natural Gas Company. One of the interested parties is Qatar's QInvest, who will bid with Egypt's private equity investor Citadel Capital. Egypt's industry has permission to import up to 1bn cubic feet of gas per day.
Efforts to increase its gas production are stalling. A bid round for 15 new blocks was extended in November after it met with little interest from international oil and gas companies.
Egypt's gas sector was boosted by BP's announcement in September that it will start work on a $10bn offshore development.