Dubai Dana Gas reported a 125 per cent jump in its first quarter net profits reaching Dh206 million for the first quarter of 2012, up from Dh92 million recorded during the corresponding period last year.
Gross revenue increased 14 per cent to Dh700 million, up from Dh616 million, while gross profit grew 34 per cent to Dh451 million, up from Dh337 million, the company said in a statement. Its production, however, declined 5.5 per cent to 63,000 barrel of energy per day (boepd), from 66,800 boepd.
Net profit rose principally from higher realised hydrocarbon prices during the quarter. The net profit excludes an unrealised gain of Dh135 million on Dana Gas’s 3 per cent shareholding in MOL, the Hungarian listed oil and gas company and a strategic partner in Dana Gas’s Kurdistan Region of Iraq (KRI) operations.
“This gain is booked directly to equity in line with the company’s published accounting policy, resulting in total comprehensive income for Q1 2012 of Dh341 million,” said the Sharjah-based company.
Group cash balances as at 31 March 2012 stood at Dh524 million (31 December 2011: Dh411 million).
“Dana Gas’s cash flow has been impacted by global macroeconomic and regional events. The revolution in Egypt last year and the subsequent unfolding turmoil in Egypt resulted in sporadic and progressively delayed payment of revenue by government-owned entities,” the statement said.
“Similarly, political disputes in Iraq have impacted planned payments by the central government to petroleum companies operating in the KRI. Despite these challenging external macroeconomic circumstances, Dana Gas hopes that these problems will resolve themselves in the short- and medium-term.”
The company’s $1 billion sukuk, secured against certain Egyptian assets as well as SajGas and UGTC, are due to mature on 31 October 2012. Although the economic realities outlined above affected Dana’s ability to raise new funding, the company said, it is committed to finding a consensual solution that is equitable to all stakeholders.
“For these purposes, the company has appointed Deutsche Bank, Blackstone Group and Latham and Watkins as its financial and legal advisors to advise on various options for discussions with the sukukholders and their advisors. The Company will provide further updates as further progress is made,” the statement said.
Earnings before interest, tax, depreciation, amortisation and exploration (EBITDAX) were Dh459 million, compared to Dh403 million in the first quarter of last year, an increase of 14 per cent.
The revenue collections attributable to the group during the quarter were Dh335 million of which Dh192 million was collected in Egypt and Dh143 million representing the company’s 40 per cent share of collections in KRI.
The company’s cash flow has been affected by macroeconomic and regional events which resulted in delayed revenue collections from its customers being mainly government entities.
Hamid Jafar, Board Chairman of Dana Gas, said: “Our revenue collections were in line with expectation and we continue to have constructive discussions with both the Government of Egypt and the Government of the Kurdistan Region of Iraq on payment of Company’s receivables.
Overall, however, this has been a reasonable quarter financially and we look forward to the rest of the year with renewed confidence.”
Dana Gas Egypt produced gas, LPG, condensate and crude oil at an average rate of 34,500 boepd in the first quarter. Production is expected to increase later in the year as compression facilities and new production wells are added, and two new fields are brought on stream. In the Kurdistan Region of Iraq, the Company’s 40 per cent share of production in the Kor Mor Field continued to increase, achieving an average rate of 28,500 boepd (2011: 19,500 boepd).
This 46 per cent increase in production was mainly due to increased gas deliveries achieved by running the 2 trains of the LPG plant and the early production facility (EPF) in parallel, and including the condensate and LPG extracted from the additional gas.
Ahmad Al Arbeed, Chief Executive Officer of Dana Gas, added: “Good progress is being made on our drilling programme in Egypt, with one new field discovery (the West Al Baraka Field) in the South of the country. We plan to drill further exploration and development wells in Northern Egypt. I am also pleased to report that the commissioning and start-up of the Natural Gas liquids plant in Ras Shukheir (Egypt) is advancing well and should be operational in Q2 of this year”.
The Company drilled and tested a successful exploration well, West Al Baraka-2, in the Komombo Concession in Southern Egypt. A reservoir fracturing test will be run in June to optimize the production rates and assess the hydrocarbon potential.
