Dana Gas Sees Revenue Growth (UAE)

Dana Gas, the Middle East’s largest regional private sector natural gas company, announced its financial results for the third quarter and nine month ended 30 September 2013 with a net profit of AED 102 million (US$28m) and AED 443 million (US$121m) respectively.

Gross revenue for the third quarter was significantly higher at AED 623 million (US$170m), an increase of 21% on Q3 2012. Earnings before interest, tax, depreciation, amortisation and exploration (EBITDAX) was AED 340 million (US$93 million) which was considerably higher by AED 23 million (US$6m) than in Q3 2012. Net profit remained flat year-on-year due to higher royalty and higher depreciation in line with higher production in Egypt. Accordingly, the Group posting a net profit of AED 102 million (US$28m) in Q3 2013 compared to AED 104 million (US$29m) in Q3 2012.

For the nine months ended September 2013 also, the Company posted gross revenues and net profit of AED 1.708 billion (US$466m) and AED 443 million (US$121m) respectively. In comparison, the Company recorded figures of AED 1.766 billion (US$482m) and AED 491 million (US$134m) respectively in 9 months 2012. This reduction in nine-months profit was due to lower realised hydrocarbon prices, suspension of LPG production since mid-2012 and a one-off higher cost of sales in 2Q 2013 in the Kurdistan Region of Iraq. Consequently, the nine months 2013 EBITDAX was AED 956 million (US$261m), down from AED 1.139 billion (US$311m) in the nine months ended September 2012.

The Company’s average production volumes were substantially higher in the third quarter at 66,850 barrels of oil equivalent per day (boepd), an increase of 17% on Q3 2012
(57,000 boepd) and 8% increase on Q2 2013 (61,700 boepd). This significant increase in production was driven by Egypt, which saw a sharp increase in quarterly production of around 30% to 39,350 boepd from 30,400. Dana Gas’s share of production in Kurdistan Region of Iraq (‘KRI’) for Q3 2013 remained stable at 27,100 boepd, up 2% quarter-on-quarter and similar to the Q2 2013 output of 27,000 boepd.

In October 2013, Dana Gas Sukuk was awarded the International Finance Law Review Award for the Middle East Restructuring Deal of the Year for its Sukuk restructuring. In May 2013, Dana Gas PJSC completed the refinancing of its US$1 billion Trust Certificates (Sukuk-al-Mudarabah) issued by Dana Gas Sukuk Limited.

Commenting on the results, Patrick Allman-Ward, Chief Executive Officer of Dana Gas, said: “Our third quarter results reflected yet another strong operational performance, particularly in Egypt. Our overall average production numbers are ahead by 17% to 66,850 boepd on a quarter-on-quarter basis. This demonstrates the inherit quality of our assets and the ability of Dana Gas employees to deliver value from these resources. We have been given strong indications by the Egypt government regarding planned payments in the next few months” added Patrick. “We welcome this positive step as it will allow our capital and exploration expenditure to remain in-line with anticipated spending plans, allowing us to pursue our strategy of maximizing our production from these resources.”

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LNG World News Staff, November 4, 2013; Image: Dana Gas