Dana Gas profits down on back of oil slump

Dubai: Dana Gas, citing falling oil prices and geopolitical issues, reported on Thursday a 19.8 percent drop in net profit of $125 million (Dh457 million) for 2014 compared to $156 million a year earlier.

Gross revenue rose 5 percent to $683 million with the Abu Dhabi-listed energy firm increasing production by 6.4 percent to 68,900 barrels of oil equivalent a day, said Patrick Allman-Ward, chief executive, in a conference call.

Much of the losses took place in the second half of the year when Brent crude, the global benchmark, lost more than half its value from around $115 a barrel in June to below $50 by December.

“Clearly we took in a hit,” Allman-Ward said.

Dana Gas received $210 million from the Egyptian government towards outstanding receivables. The payment was made up of $163 million in cash, a signature bonus of $20 million for its North El Arish Block 6 Concession Area and $27 million paid to government owned contractors against amount dues.  The receivable balance at the end of December stood at $233 million, compared to $274 million in 2013.

Dana Gas’ dispute over outstanding receivables with the Kurdish Regional Government (KRG) of Iraq is ongoing and is set for a further hearing in April after the KRG failed to make a British Tribunal ordered payment of $100 million to a consortium that includes Dana Gas. Outstanding receivables from the KRG increased 44.5 percent from $515 million in 2013 to $746 as of December 31, 2014.

Allman-Ward said he is “very interested” in exploring new projects in Iran if sanctions are lifted. However, he declined to comment as to whether Dana Gas has engaged in talk.

Iran has reportedly circulated oil contracts to foreign firms in anticipation of the lifting of US-led sanctions later this year.

Dana Gas shares were down 4.08 percent to Dh0.47 in early morning trade on Thursday.