UAE: Dana Gas 2013 Revenues Up
Dana Gas held its 8th Annual General Meeting chaired by the company’s chairman Sheikh Ahmed Bin Sultan Al Qasimi. All resolutions presented to shareholders at the AGM were approved. The AGM approved the Board of Directors’ report on the company’s financial results and the financial statements together with the Auditors report for the year ended 31 December 2013.
Commenting on the overall performance of the company, Adel Al-Sabeeh, Chairman of the Board, said: “Dana Gas made solid progress in 2013, and we have seen a robust performance across our operations, despite ongoing economic and political uncertainty in the two principal countries in which we operate. We are confident that Dana Gas is well-positioned and has the right leadership to tackle growth opportunities in the region. We remain committed to maximising value for our shareholders and look forward to future years with renewed confidence.”
During the AGM, shareholders were given an overview of the 2013 results. Dana Gas increased revenue to AED 2.39 billion (US$ 652 million) from AED 2.32 billion (US$ 633 million) in 2012 which was driven principally by an 8% increase in gross production, reaching 64,700 barrels of oil equivalent per day (boepd). The increase was led by Egypt which increased production by 14% and contributed AED 1.5 billion (US$ 417 million) to gross revenue as compared to AED 1.4 billion (US$ 370 million) in 2012.
Net profit was slightly lower at AED 571 million (US$ 156 million) compared to AED 605 million (US$ 165 million) in 2012, impacted by lower sales of LPG in the Kurdistan Region of Iraq, along with an increase in royalty payments and higher depreciation, depletion and amortization expenses in Egypt.
Cash balance improved by 24% to AED 748 million (US$ 204 million) by end of 2013 aided by an AED 194 million (US$ 53 million) payment of outstanding receivables from Egypt in December 2013.
Speaking to assembled shareholders on Dana Gas’ operational performance in 2013, the company’s Chief Executive Officer, Patrick Allman-Ward, said: “From an operational standpoint 2013 was a very successful year. We increased production levels in Egypt and won working interest in a major new concession area which has high prospectivity. In Kurdistan, the resumption of our LPG loading facilities is adding incremental revenue and will enhance profits going forward. We have also achieved progress in the development of the Zora gas field in the UAE which provides real growth opportunities. Overall we are confident that our steady progress in recent years has set the scene for further improved financial performance in the years ahead.”
Dana Gas Egypt’s gas, LPG, condensate and crude oil full year output was 14% higher at 36,700 boepd, compared to 32,200 boepd in 2012. During the year, the company also announced achieving record gas production levels equivalent to 41,500 boepd (including associated liquids) The company successfully drilled and tested one exploration and three development wells during the year and announced its 25th discovery with the Begonia-1 well in the Nile Delta. Dana Gas also won 100% working interest in the North EL Arish Offshore (Block 6) Concession Area in Egypt. In February 2014, the company successfully completed a major maintenance and tie-in work program in the El Wastani Plant.
In the Kurdistan Region of Iraq, the company’s full year share of production in the KhorMor field remain constant at 27,600 boepd. Repairs to the LPG loading bay were also completed, and lifting of the product has been steadily growing but remains below full capacity. The arbitration which was initiated in October 2013 by Dana Gas with Crescent Petroleum and the Pearl Petroleum company Limited has started with the Tribunal successfully formed and proceedings now ongoing.
In the UAE, Dana Gas is progressing rapidly with the development of the Zora Gas Field, and in November 2013, the company awarded Adyard Abu Dhabi the AED 62.5 million (US$ 17 million) contract for the fabrication of an offshore platform of the project.
In March 2014, the company issued letters of intent for the onshore gas plant, offshore pipeline installation and line pipe procurement. The project is in line for first gas production in early 2015 with expected production of 40 mmscfd.
Dana Gas’s UAE Gas Project continues to await the delivery of gas from the National Iranian Oil company (NIOC). Dana Gas’s joint-venture partner in the UAE Gas Project, Crescent Petroleum, continues to seek a legal ruling on the gas deliveries and expects a decision from the tribunal in this regard during 2014.
Shareholders were briefed that from 1 January 2014 to 15 March 2014, the company had received conversion notices amounting to US$ 51 million for the company’s Convertible Sukuk. Accordingly, approximately 250 million ordinary shares calculated at a conversion price of AED 0.75 (paid-up value of AED 1.0) will be issued. This follows the approval in April 2013 for the refinancing of the AED 3.6 billion (US$ 1 billion) trust certificates.
The AGM approved the Board of Directors’ recommendation to not distribute a dividend for the 2013 financial year, as a precautionary measure in consideration of the challenging economic environment in Egypt and the on-going arbitration proceedings with Kurdistan Regional Government, both of which have affected the collection of receivables.