Dubai: Dana Gas, the Middle East’s largest regional private sector natural gas company reported a net profit of Dh511 million for the first-half of 2021 compared to a net loss of Dh69 million in the same period last year.
Excluding the reversal of impairment related to Egypt assets, the company posted an adjusted net profit of Dh225 million versus an adjusted net profit of Dh66 million in H1-2020, an increase of 239 per cent, reflecting higher oil prices and improved operational performance.
The Company has delivered a very strong set of results for the first-half of 2021 as a result of our robust financial and operational performance supported by the rebound in oil prices. Our revenues grew by 19 per cent in the first six months which, coupled with our low-cost structure, has helped the company increase gross profits by 133 per cent
Revenue for the first six months of 2021 was up by 19 per cent and stood at Dh792 million as compared Dh664 million in H1-2020. The increase was due to higher realised prices during the period.
As a result of the increase in net profit, the company’s retained earnings turned from accumulated losses of $20 million to positive $142 million, which will underpin the company’s ability to pay dividends in the future.
On April 23, the company terminated its agreement for the sale of its Egyptian assets and will therefore continue to own and operate them in order to maximise returns for its shareholders. Following the move, Dana Gas Egypt’s operational cash flow increased in H1-2021 by 175 per cent to $80 million reflecting the increase in oil price and higher collections during the period. This reinforces the correctness of the Board decision not to sell the assets.
IPR Wastani Petroleum Limited (IPR) initiated an arbitration disputing DGE’s right to terminate the sale and purchase agreement. On July 17, the Tribunal dismissed IPR’s claim in its entirety, and ruled that Dana Gas’ termination of the SPA was valid.
Operations and production
The Company’s average production in H1 2021 was 64,000 boepd, slightly higher than 63,250 in H1 2020, driven by increased production in the KRI (Kurdistan Region, Iraq) which helped to offset a decline in Egypt. Production in KRI increased by 8 per cent to 34,300 boepd, while Egypt’s output declined by 6 per cent to 29,150 boepd as a result of natural field depletion.