Dana Gas, Crescent Petroleum Raise $500M Through Pearl Petroleum Bond Issuance

(MENAFN- Khaleej Times) Dana Gas and Crescent Petroleum have raised $500 million through a bond issuance by Pearl Petroleum, as the companies seek to refinance existing debt and fund further development of gas fields in Iraq.

The five-year senior secured bond carries a fixed coupon of 10.375 per cent and will mature in November 2031, the two UAE-based companies said on Wednesday.

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The issuance attracted strong international institutional demand and was 1.7 times oversubscribed, allowing Pearl Petroleum to increase the size of the offering to $500 million from an initial target of $400 million.

Investors from the US, UK, Europe, the Middle East and Asia participated in the transaction.

The proceeds will be used to refinance Pearl Petroleum's existing $350 million senior secured bond, fund debt service reserve arrangements, support further development of the Khor Mor and Chemchemal gas fields, and for general corporate purposes.

The successful placement comes amid elevated global bond yields, persistent inflation concerns and regional geopolitical uncertainty, reflecting investor confidence in the company's operations and growth prospects, the companies said.

“This successful bond placement demonstrates international confidence in Pearl Petroleum and in the future of Iraq's natural gas sector,” said Majid Jafar, CEO of Crescent Petroleum and board managing director of Dana Gas.

“With KM250 completed, we remain committed to the development of Khor Mor and Chemchemal fields, strengthening energy security and energy supply for millions, and supporting Iraq's economic growth.”

Richard Hall, CEO of Dana Gas, said the strong demand allowed Pearl Petroleum to increase the issuance size and secure funding flexibility to refinance its existing bond and pursue its next phase of growth.

Pearl Petroleum is a consortium jointly operated by Dana Gas and Crescent Petroleum, which each hold a 35 per cent stake. Austria's OMV, Hungary's MOL and Germany's RWE hold the remaining 30 per cent, with each owning 10 per cent.

The consortium was established in 2009 and operates the Khor Mor and Chemchemal gas fields in the Kurdistan Region of Iraq.

Pearl Petroleum has invested around $4 billion in infrastructure and operations in the region. Its gas production supplies approximately 80 per cent of the Kurdistan Region's electricity generation, making it a major contributor to the region's energy supply.

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