Dana Gas reports AED 341million Net Profit in H1 2013

Dana Gas reports AED 341million Net Profit in H1 2013

Net profit of AED 341million in H1 2013; AED 100 million in Q2 2013
• Production volumes up 5% quarterly to 61,700 boepd
• Cash balance is AED 792m in H1 2013; up 32% from FY 2012
• LPG production in Kurdistan restarted on 17 July 2013
• Appoints DR. Patrick Allman-Ward as the new CEO
Dana Gas PJSC the Middle East’s largest regional private sector natural gas company, announces its financial results for the six months and quarter and ended 30 June 2013 with a net profit of AED 341 million and AED 100 million respectively.
Average overall production volumes were up 5% to 61,700 barrels of oil equivalent per day (boepd) in Q2 and up 1% to 61,500 boepd in H1 2013. In Egypt, Dana Gas recently achieved a record production of 39,000 boepd, a 13% increase on the 2012 average production. Furthermore, LPG sales have recommenced in Kurdistan on the 17 July, energy prices having rebounded in July and monetary support is being provided for in Egypt.
H1 2013 revenue and gross profit was AED 1,085 million and AED 506 million. Earnings before interest, tax, depreciation, amortisation and exploration (EBITDAX) was AED 616 million compared to AED 822 million in the same period last year.
In Q2 2013 revenues and gross profit was AED 528 million and AED 232 million.
Commenting on the results, Dr. Adel AlSabeeh, Chairman of Dana Gas, said: “One of our principal strategies in the first half of 2013 was to concentrate on extracting higher production volumes with limited capital investment. I am pleased to announce that our group production numbers have increased 5% in the quarter and now average 61,700 barrels of oil equivalent per day (boepd). We also achieved a record average production number in Egypt of 39,000 boepd in July.
These are excellent production figures and demonstrate the high quality of assets we have in our portfolio.
“As LPG sales resume, energy prices rebound, production volumes continue to remain high, and the Egyptian economic situation stabilizes as government authorities continue to work with the international financial community to address investors’ concerns, collectively these will support our main growth strategies going forward.”
Rashid Al Jarwan Acting Chief Executive Officer of Dana Gas, added: “Good progress is being made on our drilling programme in Egypt. We discovered hydrocarbons in a new well, Begonia 1, and successfully brought production online from two previously discovered wells, Allium and West Sama. In Kurdistan, we have completed the reconstruction of the loading bay which will enable resumption of LPG and enhance revenue. Furthermore, the appointment of Dr Patrick Allman- Ward as new CEO will bring experience, knowledge and hands-on experience in Egypt, which will benefit Dana Gas immensely as it focuses on its next stage of growth.”
Production and Development
Dana Gas Egypt saw an 11% year on year increase in production volumes,
averaging 34,300 boepd in Q2 2013 and also achieved a record production in July of 39,000 boepd, up 13% from 2012.
The Company was successful in bringing online production from tie-in of South Abu El Naga dry gas well, new discoveries of Allium in West El Manzala concession and West Sama in West El Qantara concession. Production is expected to increase still further in H2 2013 as compression facilities and new production wells are brought on-stream.
In the Kurdistan Region of Iraq, the Company’s 40% share of production in the Kor Mor Field for the second quarter averaged 27,000 boepd (Q2 2012: 27,900 boepd).
The decline in production was mainly due to the suspension of LPG production following an accident last year by a third party tanker. The reconstruction and upgrading of the loading facilities at a cost of $15 million was carried out and was completed in July 2013. The Kor Mor LPG Plant now has the capacity to produce up to 900 tonnes/day of LPG, the equivalent of approximately 10,000 boepd and will help enhance Companies’ revenues and profitability.
Together, the Group’s net production averaged 61,700 barrels of oil equivalent per day (boepd) from its interests in Egypt and the KRI during the three months ended 30 June 2013.
Exploration & Appraisal
During Q2 2013, the Company added the Begonia-1 gas discovery to its Egypt portfolio. Located in the West El Manzala concession, the well encountered 15 m of net pay in a good quality sandstone reservoir of the Lower Abu Madi Formation. The evaluated resources for the Abu Madi Lower pay zone are between 7 and 15 billion cubic feet (bcf) and around 100,000 barrels of condensate.
Liquidity and Financial Resources
Cash balance, as of 30 June 2013, stood at AED 792 million (31 December 2012: AED 601 million).
Overall net trade receivables, as of 30 June 2013, stands at AED 2.47 billion (US$ 674 million).
In Egypt, Dana Gas collected AED 203 million in H1 2013 against its receivables (H1 2012: AED 431 million) and as of 30 June 2013, the balance stood at AED 960 million (31 December 2012: AED 866 million).
Dana Gas continues to engage with relevant government authorities regarding its overdue receivables and its future capital expenditure plans. It welcomes and actively supports the Government’s desire to increase local hydrocarbon production in order to meet growing domestic demand. Discussions of fiscal support by the international community will also play a significant role in addressing investment decisions by key international investors.
In Kurdistan, Dana Gas collected AED 223 million in H1 2013 against its share of receivables in Kurdistan (H1 2012: AED 218 million) and as of 30 June 2013, the balance of its share stood at AED 1,473 million (December 2012: AED 1,298 million).
Source: danagas.com
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