Pearl Petroleum, the company consortium led by Crescent Petroleum and Dana Gas of the UAE, has

signed a 10 year Gas Sales Agreement (GSA) with the Kurdistan Regional Government (KRG) to supply

and sell the additional quantities of gas that it plans to begin producing later this year in order to boost

much needed local domestic electricity generation.

The GSA was signed on 30th January 2018 by the KRG Minister of Natural Resources Dr. Ashti Hawrami,

CEO of Crescent Petroleum Mr. Majid Jafar and CEO of Dana Gas Dr. Patrick Allman-Ward, to enable

an increase in delivered gas production from the Khor Mor Field by an anticipated 80 million cubic feet

of sales gas per day before the end of 2018, from the current level of 305 million cubic feet per day.

All contractual conditions precedent for the agreement have since been satisfied and consequently

the project work has now commenced.

In August last year, Pearl Petroleum reached a full and final settlement with the KRG of the arbitration

between them, including receiving $1 billion in cash from the KRG for past receivables and committing

to expand their investment and operations in the region. These expansion plans include a multi-well

drilling program in both the Khor Mor & Chemchemal fields, as well as installation of additional gas

processing and liquids extraction facilities. The fields are operated jointly by Crescent Petroleum and

Dana Gas on behalf of Pearl Petroleum.

The initial phase of this expansion is through a fast-track debottlenecking project, whereby Pearl will

increase daily production of natural gas and condensates from the Khor Mor Field by around 25% later

this year which will deliver much needed gas to fuel additional affordable power generation for the

benefit of the local population and Iraq as a whole. This accelerated debottlenecking project

represents an important first step in the overall plan to increase gas production by a further 125%

within 2 years after that to eventually reach around 900 million cubic feet per day of gas production,

together with associated liquids.

Total investment to date exceeds $1.3 billion with total cumulative production over 228 million barrels

of oil equivalent (boe), which has resulted in billions of dollars of fuel cost savings and economic

benefits for the Kurdistan Region and Iraq as a whole. Operation full-time staff numbers are close to

500 with over 80% localisation, and training programmes to increase this figure further. In addition,

Pearl has contributed to local communities with support for local power generation, education and

healthcare facilities, as well as support programmes for internally displaced Iraqis.

Dana Gas has previously announced that the appraisal programme has to date resulted in proven

certified reserves of 15 trillion cubic feet (tcf) of gas and 310 million barrels condensate.

Dr. Ashti Hawrami, Minister of Natural Resources of the Kurdistan Regional Government (KRG) said:

“The Kurdistan Region of Iraq holds potentially more than 200 tcf of gas and the KRG is committed to

playing a positive role in the growing gas and electricity needs of Iraq and the region. We are pleased

to see the further commitment of expansion and investment by the companies and the anticipated

growth in gas supplies will make a positive contribution to the growing domestic needs for more

electricity.” Mr. Majid Jafar, CEO of Crescent Petroleum and Board Managing Director of Dana Gas, commented:

“The gas sales agreement marks an important milestone in our tenth year of continuous production,

and the beginning of a new chapter of expansion in operations and production which will see a further

investment of over $600 million over the coming few years and a more than doubling of production.

The gas we have produced has led to significant fuel savings and social and economic value for the

economy, and we hope to grow this in the years to come from the significant resources of these world

class fields, for the benefit of the Kurdistan Region and all of Iraq.”

Dr. Patrick Allman-Ward, CEO of Dana Gas, added:

“We and our partners in Pearl Petroleum are proud to be the largest investors and producers in the

gas sector of the Kurdistan Region. Despite all the challenges we have maintained our production

levels and operations and now with the settlement of all past receivables last summer and continuous

payments since then, we look forward to significantly growing production to meet the growing

demand for gas and electricity in the Kurdistan Region and Iraq as a whole.”

Pearl has also implemented a corporate social responsibility program to support local communities,

including providing school supplies, drinking water treatment, generators and fuel enabling 24-hour

electricity for local villages, mobile medical units, and youth sports facilities, as well as financial

support for 1,000 orphans from the Chemchemal area in partnership with a local charity Foundation.

These initiatives are assisting the local communities in improving their standard of living, health, well-

being, security and stability and the development of human capital.

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