Dana Gas and Crescent Petroleum expect that the recent multi-million-dollar oil payment by Baghdad to the Kurdistan Regional Government (KRG) means they will get paid for gas they have supplied to the region, the companies said on Sunday.

The United Arab Emirates-based companies have faced difficulties getting paid for all of the fuel they have supplied to power stations in Kurdistan that has helped maintain secure supplies of electricity for millions of people in a country where fuel shortages are commonplace.

But Baghdad's pledge last month to pay foreign companies working in Kurdistan in return for the KRG guaranteeing oil exports, and a first installment of around $559 million being received by the KRG in early October, could see debts settled soon.

"We are working with the KRG to improve and resolve the outstanding receivables, and are very encouraged by the recent announcement on the resumption of payments from the Federal Government," Rashid Al-Jarwan, acting CEO of Dana Gas, said in a statement to the Abu Dhabi stock market.

Dana Gas said in its 2011 results that trade receivables at the end of the year stood at 1.74 billion dirhams, of which about 48 percent was owed by Egypt and 52 percent by Kurdistan.

Neither company has said how much they are owed.

Dana Gas, which was also owed 729 million dirhams ($198.5 million) for unpaid fuel bills by Egypt as at June 30, 2012, is 20 percent owned by Crescent, according to Thomson Reuters data.

Despite payment issues, the companies have continued to increase supplies in Kurdistan, with total fuel production rising from 70,000 barrels of oil equivalent per day in early August to 80,000 in mid October, the companies said on Sunday.

Four years since production started, natural gas production has reached 340 million cubic feet a day (mcfd), up from 330 mcfd in early August, while gas condensate production stands at 15,000 barrels per day.

"We are working with the KRG Ministry of Natural Resources on the next phase of development and expansion, to grow our operations," Majid Jafar, CEO of Crescent Petroleum and Dana Gas board member, said in statement to the UAE stock exchange.

Since the start of production in October 2008, some 279 billion cubic feet of gas and 13 million barrels of condensate have been produced by the operators of the Khor Mor field in Kurdistan, they said.

(Reporting by Daniel Fineren; Editing by Louise Heavens)