Dubai: The ADX-listed energy company Dana Gas saw net profit slip to Dh586 million from Dh667 million, as volatility in hydrocarbon prices played a part. Yet, the company was able to partly offset this by production increases at its operations in Kurdistan Region of Iraq (KRI) and from reduced operating costs.
This even though Dana Gas had reported drone attacks happening at its KRI facility, which resulted in production coming under temporary halt. (There have been no casualties.)
In the short-term, Dana Gas is looking for the go-ahead to extend operations at its Egypt facility.
“2023 was an operationally strong year for Dana Gas, but not without its challenges," said Richard Hall, CEO. "In the KRI, we achieved record production in our gas output, an accomplishment that underscores our ability to optimize resources.
"During the last quarter 2023, our financial position saw an improvement in our receivables in KRI, with a new mechanism agreed for direct payment from the power stations as well as a schedule to reduce past receivables, positioning us well for 2024, where enhancing our liquidity and reinstating dividends are key objectives for the company."
Dana Gas' 2023 revenues decreased 20 per cent to Dh1.55 billion from Dh1.94 billion . But the company can look to lower operational costs, down 7 per cent, to Dh195 million.
Dana Gas’ realized prices in 2023 averaged $51/bbl for condensate and $35/boe for LPG against $79/bbl and $42/boe respectively in 2022.
"Consequently, Dana Gas is not in a position presently to recommend a dividend to the upcoming shareholder’s meeting," said a statement. "However, recognizing the declared profitability in 2023, the company does expect to make the associated dividend distributions in the future as sufficient cash is received.
"Dana Gas remains committed to its declared dividend policy, and to reinstating dividend payments as soon as the company’s cash receipts permit."
“Looking ahead to 2024, we will continue to work with our government partners in KRI and Egypt to ensure timely payments of invoices and to achieve another year of successful operations," said Hall. "Our focus remains on developing our world-class assets in the KRI and maximising the value of our Egypt assets, post ratification by the Egyptian Parliament.”
Expectations are the ratification by the Egyptian Parliament of the consolidated Concession Agreement will happen during this quarter. The agreement would then extend the operational lifespan of Dana Gas' Egyptian assets and support its production levels and includes further investment of approximately $100 million.
"The increase was a result of the successful completion of further plant de-bottlenecking enhancements at the Khor Mor facility, a strategic response to the growing demand for natural gas in the KRI," said a statement.
In November, to meet the growing power demand, the company achieved 'record' production output of 520 MMscf/d.
"Pearl Petroleum continued to make steady progress on the KM250 expansion project in 2023, with the drilling of six KM250 project wells successfully completed, and it expects completion of the KM250 project in the second-half of this year, the statement added.