Dana Gas PJSC Announce Results for the half year ended 30 June 2020
The Company’s H1 2020 net profit was $18 million (AED 66mm) compared with $52 million (AED 191mm) in H1 2019 on a like-for-like basis and excluding one-off impairments, earn-out amounts, and deferred income. On an adjusted basis, the Company recorded a loss of $19 million (AED 69mm) as a result of a $37 million impairment charge related to oil and gas assets in Egypt due to low oil prices, and decreased value of its financial assets.
Revenue for the first six months of the year stood at $181 million (AED 664mm) as compared to $242 million (AED 887mm) in H1 2019, down 25%. The decrease is largely due to lower realised prices during the period, which had a $42 million impact, and, to a lesser extent, lower production in Egypt as a result of natural field declines. Realised prices in H1 2020 averaged $30/bbl for condensate and $28/boe for LPG compared to $51/bbl and $33/boe respectively in 1H 2019.
The Company implemented cost cutting measures, achieving $2 million (AED 7.3mm) saving in G&A costs with further savings expected in H2 2020. Capex was also cut by 72% to $25m (AED 92mm) as all non-essential work was deferred.
In Q2 2020, Brent averaged $30/bbl and touched a low of $9/bbl on 21 April 2020. Despite historical low prices, Dana Gas ended the second quarter close to breakeven with a small net operating loss of $3 million, demonstrating its ability to stay resilient even in a low oil price environment given its fixed price long term gas contracts.
The Egypt sales process continues although it has been delayed as a result of the COVID-19 pandemic. The Company expects to make a further announcement during H2 2020.
Regarding the Sukuk, the Company continues to explore the various financing options available to it, and as previously announced, has hired financial advisors to assist it in evaluating these options.
H1 2020 Highlights
Operations continue uninterrupted during the ongoing Covid-19 pandemic with stringent health and safety protocols in place across all assets.
Net Profit of $18mm (AED 66m) before one-off impairments despite sharp decline in energy prices.
Significant cost cuts implemented in Q2; capex cut by 72% to $25mm (AED 92mm).
Average group production of 63,250 boepd.
Cash balance of $366mm (AED 1,341mm).
$88.5mm Sukuk buyback completed between January and August 2020.
Source: Dana Gas PJSC
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