Dana Gas plans sukuk issue to fund growth strategy

The sukuk issue is part of Dana Gas' strategy to put in place a more efficient capital structure through broadening and diversifying the financing channels for the continued growth and expansion of the Company's activities. Dana Gas is seeking approval from its shareholders to raise at least US$1 billion in new funds through this convertible sukuk bond issue, after receiving the necessary approvals from the UAE Securities and Commodities Authority (SCA).

"This is an important step for Dana Gas, as we look to fund the next phase of the Company's growth plan in the natural gas industry across the Middle East Region," said Mr. Hamid Dhiya Jafar, Executive Chairman of Dana Gas. "In addition to enabling the Company's ambitious growth strategy through the planned pursuit of identified opportunities, the bond issue will also position Dana Gas in international capital markets, where international institutions are showing increased interest in the region and especially the rapidly-growing natural gas sector."

Dana Gas is in the process of appointing Lead Managers for the issue of the sukuk and is in discussions with several major international banks that have shown great interest in leading the issue. The final details and terms of the proposed sukuk will be established once approval has been obtained at the EGM from the shareholders, which is scheduled on Tuesday 26 June 2007, or Tuesday 3 July 2007 if quorum is not reached at the first meeting.

A sukuk is a Sharia compliant, fixed term, debt obligation which could ordinarily be converted into shares of the issuer at the election of the sukuk investor and, under certain conditions, at the election of the issuer of the sukuk. The issuer of the sukuk is normally required to pay a periodical coupon "Profit Rate" until the maturity of the sukuk, which is likely to be 5 years.

Worldwide Islamic banking assets currently total around US$ 500 billion and are growing at over 15% per annum, with Islamic banks and financial institutions managing over US$ 250 billion of assets and a further US$ 200 to US$ 300 billion managed by the Islamic subsidiaries of international banks.

Dana Gas is currently undergoing a regional expansion in all sectors of the growing natural gas sector across the Middle East. In January of this year the Company completed the US$ 1.1 billion acquisition of Centurion Energy, making it Egypt's sixth largest gas producer and marking its entry into the exploration and production sector. In April, Dana Gas also concluded important agreements for gas projects with the Kurdistan Regional Government of Iraq, with a first phase investment of approximately US$ 400 million.

The Company was recently granted an award by the Abu Dhabi Stock Market (ADSM) for excellence in corporate disclosures and transparency.