Dana Gas Revenues Grow 21% to AED 623 Million

Dana Gas Revenues Grow 21% to AED 623 Million

Dana Gas, the Middle East’s largest regional private sector natural gas company, announces 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 104million (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 491million (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, Dr. 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 Dr. 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.”

Production and Development
Dana Gas Egypt’s gas, LPG, condensate and crude oil output averaged 39,350 boepd in Q3 2013, a massive increase of around 30% over Q3 2012 average production. During the period, the Company had also announced that it reached record gas production levels equivalent to 41,500 boepd (including over 8,000 barrels per day of associated liquids), the highest level in two years and representing a growth of around 30% over the 2012 average production.
In the Kurdistan Region of Iraq, the Company’s share of production in the Khor Mor Field for the third quarter averaged 27,100 boepd (Q3 2012: 26,600 boepd). The reconstruction and upgrading of the LPG loading facilities at the Khor Mor processing facility is complete and the plant has the capacity to produce up to 900 tonnes per day of LPG, the equivalent of 10,000boepd.

Together, the Group’s net production averaged 66,850 boepd, a significant increase of 17%,from its interests in Egypt and the KRI during the third quarter ended 30 September 2013.

Liquidity and Financial Resources
Cash balance, as of 30 September 2013, stood at AED 674 million (US$184m) (30 June 2013: AED 792 million (US$216m)). This, in addition to the Company’s other liquid investments allows the company to follow a prudent cash utilisation policy in terms of fulfilling its business-critical capital expenditures and operating expenses and meeting its financial obligations.
Overall trade receivables, as of 30 September 2013, stood at AED 2,775 million (US$757m).

In Egypt, Dana Gas collected AED 30 million (US$8m) in Q3 2013 against its receivables (Q3 2012: AED 117 million (US$ 32m)) and, as of 30 September 2013, the trade receivable amount was AED 1,093 million (US$298m) (30 June 2013: AED 960 million (US$262m)).
In the Kurdistan Region of Iraq, Dana Gas collected AED27 million (US$ 7m) in Q3 2013 against its share of receivables in Kurdistan (Q3 2012: AED 73 million (US$ 20 million)) and, as of 30 September 2013, the balance was at AED 1,646m (US$450m) (30 June 2013: AED 1,473million (US$402m)).

Dana Gas is actively engaged in ongoing dialogue with relevant government authorities in Egypt and the Kurdistan Region of Iraq regarding receivables and its future capital expenditure plans. In the interim, the company continues to follow a prudent cash utilization policy and a calibrated capital expenditure programme.

Zora (UAE) Project Update
The Zora Project agreements between Sharjah and Ajman Governments of the UAE were signed jointly to develop the shared field located around 40 kilometres off the two coasts.

These included a unitization agreement for management of the shared field, gas sales and purchase agreements, and the joint operating agreement.

Discussions on the project are close to completion in order to award the contract for fabrication and installation of the offshore unmanned platform. As the project enters a new phase (fabrication and construction), a dedicated team, formed by Dana Gas, is driving the project to completion.

Exploration & Appraisal
During the period, Dana Gas Egypt was successful in bringing online production from the tie-in of South Abu El Naga wet gas well and Allium in the West El Manzala concession; West Sama in West El Qantara concession and West El Baraka in Komombo concession.

Arbitration
On 21 October 2013, Dana Gas, along with Crescent Petroleum and Pearl Petroleum has commenced arbitration proceedings at the London Court of International Arbitration (LCIA),in order to confirm certain contractual rights under their Agreement with the Kurdistan Regional Government of Iraq (KRG), which was signed in April 2007 and is governed by English Law.

-ENDAbout
Dana Gas
Established in 2005, Dana Gas is the Middle East’s first and largest regional private sector natural gas
company with a public listing on the Abu Dhabi Securities Exchange (ADX). It has exploration and
production assets in Egypt, Kurdistan Region of Iraq (KRI) and UAE, with an average output of 63,400
boped in 2013. Dana Gas aims to play a major role in the rapidly growing natural gas business in the
Middle East and North Africa.

Source: www.danagas.com

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