Dana Gas shares hit a three-year high after Kurdistan Regional Government (KRG) announced that it had signed an agreement to increase production of gas from the Khor Mor field later this year, with the aim of boosting electricity for the Kurdistan Region and Iraq.

In the announcement, the KRG’s Ministry of Natural Resources (MNR) said it had signed a 10-year agreement for gas production and sales with Pearl Petroleum on 30 January 2018.

Pearl Petroleum is a consortium led by Dana Gas and Crescent Petroleum.

In the wake of the announcement Dana Gas shares rose, closing up 12 per cent at AED0.84.

Under the terms of the agreement gas production from Khor Mor field will increase by 25 per cent later this year, from 320 million cubic feet a day currently to 400 million cubic feet a day.

Pearl Petroleum will now proceed with a multi-well drilling program in the Khor Mor and Chemchemal fields, as well as installation of new gas processing and liquids extraction facilities.

In its statement the KRG said: “The overall aim is to increase gas production by a further 125 per cent within two years, to 900 million cubic feet a day.”

Ashti Hawrami, KRG Minister of Natural Resources, said: “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.”

In a separate statement released by Dana Gas the company said the 25 per cent increase in production at Khor Mor would be achieved through “a fast-track debottlenecking project”.