Abu Dhabi: Dana Gas, the Sharjah-based natural gas company, reported on Wednesday Dh22 million in net profit for the first quarter of 2015, marking a 50 per cent plunge from the Dh44 million reported in the same quarter of 2015.

Revenues were also lower, reaching Dh301 million in the first three months – down from the Dh422 million recorded in Q1 2015 as lower oil prices continued to take a toll on the company’s financial performance.

Brent crude prices reached new lows in mid-January that were below $29 a barrel, with the highest price seen during the first three months of 2016 being around $35.

“It has, of course, been a very challenging oil price environment in the first quarter of the year. Average Brent prices were $33 dollars; that’s the lowest average price for the quarter since 2003, which is before Dana Gas was even brought to the market, so from a historical perspective, it is the lowest oil price environment the company has experienced in its entire history but we still managed to remain profitable,” said Dr Patrick Allman-Ward, chief executive officer of Dana Gas.

He said that he expected to see improved revenues, however, now that oil prices are starting to show some improvement. Oil prices currently stand at nearly $45 a barrel.

In order to counter the impact of lower revenues, the CEO reiterated that Dana Gas will cut costs cross its operations, and while he did not disclose a target for the drop in costs, he said it will be “as high as possible.”

In January this year, Allman-Ward said the company was working on reducing its overall general and administrative spend from 2015 to 2016 by 50 per cent.

However, the company’s latest income statement shows that operating costs in Q1 2016 stood at Dh48 million, which is higher than the Dh44 million in costs in the same quarter of 2015. The income statement for the full-year 2015 also shows an increase in operating costs to Dh205 million from Dh202 million in 2014.

During a conference call on Wednesday to discuss the financial results, Allman-Ward also told reporters that Dana Gas received payments of $23.5 million from Egypt and $18 million from the Kurdistan Region of Iraq (KRI).

“That means our receivables have moved up very slightly, and are respectively $226 million and $733 million in Egypt and Kurdistan. Clearly, this is an area of ongoing and continued concern for management, and we continue to hold close dialogue with governments of Egypt and Kurdistan to look for resolutions. I think we will come to some good news particularly with respect to the Kurdistan region later on,” he said.

Dana Gas has entered into a new agreement with KRI’s Ministry of Natural Resources to receive regular monthly payments. This comes after legal disputes that spanned over two years between the company and the KRI government about the latter’s failure to pay on time for projects Dana Gas had delivered.

Looking at the company’s total production levels, they reached 60,500 barrels of oil equivalent per day in Q1 2016 – down 12 per cent from the same quarter in 2015. This was due to lower production in KRI and a 12 per cent net decline in production in Egypt.