Dana Gas produces most of its energy in Egypt and Iraq. The company on Wednesday posted a 2019 net profit of Dh575 million from a prior-year loss of Dh682 million. Image Credit: Gulf News Archives

Dubai: Dana Gas on Wednesday posted a 2019 net profit of Dh575 million ($157 million) from a prior-year loss, as higher production from Kurdistan Region of Iraq partly offset impact from lower prices.

Dana Gas, the Middle East’s largest regional private sector natural gas company, swung to what the company called is its “highest annual profit in seven years” after recording a loss of Dh682 million ($186 million) in 2018.

“Dana Gas registered strong performance metrics in 2019 underscoring its increasing financial resilience in what has been a challenging year for the oil industry,” said Chief Executive Patrick Allman-Ward.

The natural gas company said comparable net profit from core operations, which excludes one-off impairment, earn-out and deferred income, increased by 80 per cent. The Abu Dhabi-listed energy producer has its main assets in Egypt and in the Kurdistan Region of Iraq (KRI).

Production boost

Dana Gas recorded a 5 per cent rise in production during the year. This was boosted by an 18 per cent increase in production from KRI, which added $40 million in revenues as a result of a debottlenecking project in the region. The production increase helped offset partly the impact of lower prices, it added.

The firm had reported earlier that it had recorded an impairment in its 2019 nine-month results that was caused by the Merak-1 well in Egypt – drilled in Q3 2019 - not encountering commercial hydrocarbons.

When Sharjah recently discovered a new well of natural gas and condensate onshore in the emirate – its first in more than three decades - Sharjah-based Dana Gas’ Allman-Ward said in its earnings call that it participated in a bid, but later decided to not drop out citing it was not “material enough”.

Egypt assets sale

Dana Gas has also been looking into sell its Egyptian assets, which was reported worth over $500 million, as the company shifts its focus to its Kurdistan operations.

Allman-Ward told reporters in the call that it had received “a number of offers from a number of companies” interested in purchasing its assets in Egypt, before the bidding process closed in November.

The request for the bidders was for all of its assets in Egypt, Allman-Ward said, but added that “there is flexibility” on selling assets separately to different parties.

“We have sufficient clarity on the value of bid and are undergoing due diligence on the bids received,” Allman-Ward said. “We hope to make a decision by the first quarter of this year.”

When asked whether the firm plans to expand anywhere, Allman-Ward said that with the growth potential of KRI, for the “foreseeable future” it will remain focused on KRI and “double down” in the region. The firm is aware of the recent history of disputes in the region – “but that is now behind us and we are looking forward to developing assets in the region” – Allman-Ward added.

London listing

Dana Gas had revived its plans last year to the seek a London listing after more than eight years when it first expressed intentions to explore the option in 2011, citing the lower value of the shares at the time.

Allman-Ward said on Wednesday that although no decision was made yet in this regard, the firm is continuing to explore the listing.

The stock markets in the UAE have seen reduced volume of trade amid a global economic slowdown and volatility during the three year-oil price slump, which began in 2014. Abu Dhabi’s benchmark securities index has inched up 1 per cent in the last year, while Dana Gas shares climbed about 7 per cent over the period.