Dana Gas shares jumped on Sunday to the highest level in seven months following a favourable court ruling in an arbitration case in London.
The Abu Dhabi-listed firm’s stock prices jumped 14 percent to 58 fils after company confirmed that a consortium led by it won long-term rights to develop and produce gas and petroleum from Khor Mor and Chemchemal for 25 years. These rights had previously been disputed by the Kurdistan Regional Government (KRG) since May 2009.
Abu Dhabi's ADX General Index advanced 0.23 percent to 4,737.58 points.
In a regulatory filing to Abu Dhabi Securities Exchange, the company said that a London Arbitration Court confirmed the KRG’s obligation to pay the group, adding it’s owed $1.93 billion as of the end of May.
“The case is clearly moving forward,” Abdul Kadir Hussain, chief executive officer at Mashreq Capital DIFC Ltd, said, in a comment to Bloomberg newswire. “It’s a positive for Dana Gas because it means it could get its cash.”
The remaining claims in the arbitration, including the consortium’s claims for wrongfully delayed development of the fields, will be heard during the next phase of the Arbitration, currently scheduled for the first quarter of 2016.
According to the Dana Gas statement to ADX, the KRG remains in default of the Arbitral Tribunal’s order of 2014 to pay the consortium $100 million on an interim basis. Dana Gas led consortium in a statement on Sunday reiterated their continued commitment to the contract, which will help the full and proper development of the Khor Mor and Chemchemal fields.
The energy company continues to produce an average of over 84,000 barrels of oil equivalent (BOE) per day, including 335 million cubic feet per day of gas that enables affordable electricity in the region.
By Haseeb Haider
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