Along with a recovery in oil prices from the last quarter of 2021, the Ukraine conflict and fears of embargo on Russia’s oil and gas has stoked high prices for natural gas. This has led to price levels not seen since early October last.
It was on the back of soaring energy prices from the second-half of 2021 that UAE-based Dana Gas with a market cap of Dh8.39 billion announced a 45 per cent hike in its annual dividend after returning to profits last year. The dividend yield stands at 7.56 per cent. By carefully managing costs and operations, Dana Gas achieved record profits and collections over the past year, during a period of rising energy prices.
As a result, its shares rose last year to their highest level since 2009, advancing by 48 per cent in 2021 and 11 per cent in Q1-2022. Net profit for the 12 months to the end of December climbed to $317 million, compared to a loss of $376 million in 2020. Cash balance stood at $185 million, an increase of 70 per cent compared to $109 million a year ago.
Cost structure revamp
The company, which spent about $126 million on capital expenditure in 2021, is expected to maintain the same level of spending It does not have any plans sent to raise further debt. As a result of the steps Dana Gas has taken to increase production and reduce its cost structure, it is well-positioned to benefit from rising energy prices and create shareholder value. In January, the company and Crescent Petroleum, its affiliate, reported gas production from their operations in the Kurdistan Region of Iraq surging 50 per cent compared to 2018.
Process improvements
This was to reach a record 452 million cubic feet of gas per day in 2021. The growth is supported by several process improvements at the gas plant, including a bypass project completed in 2020 and a de-bottlenecking programme in 2018.
Dana Gas has been included in ADX’s brand-new blue-chip FTSE ADX 15 Index (FADX 15). The index includes ADX’s 15 most liquid companies, chosen based on free-float adjusted market cap and median trading value. Dana Gas’ inclusion in FADX 15, the most liquid market index on the Abu Dhabi exchange, highlights the company’s progress over the past two years.
