Dubai: Dana Gas on Thursday posted a 32 per cent drop in first quarter net profit for 2014 to Dh164 million, from Dh241 million during the same period a year ago.
Net profit fell mainly due to a one-off gain of Dh143 million in the first quarter of 2013, after the partial sale of its shares in MOL Hungarian Oil and Gas, according to company statement on the Abu Dhabi Securities Exchange (ADX) website.
The UAE-based natural gas company recorded an operating profit of $45 million for the first three months of the year, up 67 per cent from the $27 million in the same period in 2013.
Gross profit stood at $87 million during the first quarter of the year from $75 million during the corresponding period a year ago, while gross revenue amounted to $180 million, up 18 per cent compared to 2013’s first quarter revenue of $152 million. Increase in production and sales, and tighter control of operational expenditure were the drivers of revenue and operating profit.
As of the end of last month, Dana Gas received voluntary conversion notices for a convertible sukuk amounting to $65.4 million.
The company’s total assets remained unchanged at $3.53 billion.
Dana Gas’ overall production, meanwhile, was up 12 per cent, recording an average of 68,800 barrels of oil equivalent per day (boepd) compared to 61,400 during the same period last year.
Dana Gas closed on Thursday at 0.87 fils, down 4.4 per cent from the previous closing, according to the ADX website.
Egypt
In Egypt, the gas firm recorded a 17 per cent year-on-year growth in first-quarter production, from 33,400 (boepd) to 39,100. In the Kurdistan region of Iraq, meanwhile, company registered 29,300 boepd, up six per cent from 27,700 in the first quarter of 2013.
Dana Gas received a payment of $3 million from the Egyptian government during the first quarter of the year but did not receive any payment from the Kurdish regional government. As a result, receivables were higher by $68 million to $583 million, resulting in the company’s cash balance to stand at $155 million.
The company’s receivables from Egypt stood at $278 million at the end of the first quarter. Last year, it received a payment of $134 million. The company could reportedly collect a payment in June. The Egyptian government said it will pay around $1 billion to foreign oil companies during that period from the $6.3 billion it owes to them.
“We’re hopeful that discussions which are currently ongoing will result in a clear payment schedule being established in the near future. As soon as such an agreement is in place, we will be in a position to increase our production significantly in Egypt in the near future,” Patrick Allman-Ward, chief executive of Dana Gas, told reporters during a conference call on Thursday.
“The more money we collect in Egypt, the more we will invest in Egypt. There is a very clear and immediate benefit to the Egyptian government to pay us more because we will invest that money straight back in the country to grow our production,” he added.
Dana Gas said it is concentrating on commercial and long-term production growth opportunities in the Nile Delta and offshore Eastern Mediterranean.
Also, the company is in talks with the Egyptian Natural Gas Holding Company (EGAS) to create a scheme that can lead to “a sustained [and] predictable revenue stream going forward” for the company, according to Allman-Ward.
Dana Gas collected $69 million from Kurdistan during the first half of 2013 and did not receive payments afterward. The receivable balance stood at $515 million at the end of the year. As a result, a tribunal had been formed in a London arbitration case against the Kurdistan regional government, and proceedings, which started in January, are still ongoing. The case was filed last October with a consortium of partners in Kurdish gas projects.
