The United Arab Emirates-based energy firm Dana Gas swung to a $134.2mn profit in the fourth quarter of 2015, as a one-time contribution from an arbitration process helped offset the global downturn in energy prices.
Dana Gas made a net profit of $134.2mn in the three months to December 31, compared with a loss of $4mn in the prior-year period, Reuters calculated, based on the firm’s full-year earnings statement in lieu of a quarterly breakdown.
Dana Gas reported falling profits in the first and second quarters and a loss in the third quarter of 2015, hit by oil prices. Its chief executive officer, Patrick Allman-Ward, warned in November after reporting the third-quarter loss that the final three months of 2015 would be ‘similarly challenging’.
However, the company said in a statement that it received cash later that month from RWE settling an arbitration which transferred a 5% interest in Pearl Petroleum Company. It didn’t disclose the cash amount received.
RWEST Middle East, a unit of the German energy firm, agreed to join the Pearl Petroleum group, which reduced the stakes of both Dana Gas and Crescent Petroleum from 40% to 35%, following a London arbitration process initially begun in December 2010.
The cash also helped to boost its annual profit for 2015 to $144mn, up from $125mn in the previous year.
The tumble in crude prices since a June 2014 peak and a 15% decline in production from Egypt contributed to a 39% fall in 2015 gross revenue to $417mn, the statement said.
Like oil and gas companies around the world, Dana has been cutting costs to adapt to lower prices. It has previously announced it would cut general and administrative expenses by 55% in 2016 and operating expenses by a smaller amount.
However, Allman-Ward added in Sunday’s statement that it expects higher production levels and resulting cash flows, particularly in Egypt and also in the UAE with the anticipated start-up of the Zora Field.
Egypt still owes Dana $221mn as of December 31, as well as $727mn in the Kurdistan region of Iraq, according to the statement.
