Dana Gas, the Middle East’s largest regional private sector natural gas company, today announced its financial results for the six months of 2014 and second quarter ended 30 June 2014.
In the second quarter of 2014, the Company reported a 70% jump in net profit to
$ 46 million (AED 169 m) as compared to $ 27 million (AED 100 m) in 2Q 2013. The increase in revenue was due to increased production across the Group which increased by 17% on a year-on-year basis and higher realized hydrocarbon prices during the period.
During first half of 2014, profit from operations increased by 68% to $ 91 million
(AED 333 m) as compared to $ 54 million (AED 198 m) in 1H 2013. This excludes the one-off gains of $ 39 million (AED 143 million) arising out of the partial sale of MOL shares in 1H 2013. Gross revenues and gross profit were $ 367 million (AED 1.35 bn) and $ 172 million (AED 630 m), 24% and 25% better than in 1H 2013. A combined increase in production in Egypt and resumption of LPG production in the Kurdistan Region of Iraq (KRI), along with higher energy prices and a reduction in cost of sales were the major contributors towards this rise in revenue and gross profit.
Average overall production volumes increased by 17% in 2Q 2014 to 72,200 barrels of oil equivalent per day (boepd) as compared to 61,700 boepd in the same period last year. Dana Gas Egypt experienced a continued upturn in average 2Q production to 42,950 boepd, a 25% increase vis-à-vis the 34,300 boepd achieved in 2Q 2013. In the Kurdistan Region of Iraq (KRI), the Company’s share of production in the second quarter was also higher by 7% to 28,800 boepd vis-à-vis 27,000 boepd in 2Q 2013.
Commenting on the results, Dr. Patrick Allman-Ward, Chief Executive Officer, said: “Dana Gas has continued to deliver impressive production growth and consistent operational and financial performance despite ongoing challenges in our key markets. This is the result of a business strategy that has focused on operational delivery whilst addressing the issue of unpaid receivables from our government clients and diversifying our business exposure. The focus on operational performance has seen us achieve better operating profits and margins, revenues and a 17% increase in production output in the second quarter. We continue to address and make progress on our overdue receivables. We continue to focus on diversification, and are progressing the development of the Zora field in the UAE and review other new business development opportunities.”
EGYPT
Average daily production in 2Q 2014 was 42,950 boepd. This represents an increase of 25% compared to the same period last year (2Q 2013: 34,300 boepd). Higher production was mainly driven by start-up of Salma/Tulip field and production optimization of other fields.
Dana Gas will continue to concentrate on its most commercial and long-term production growth opportunities in the Nile Delta and offshore Eastern Mediterranean.
KURDISTAN REGION OF IRAQ
Production
The Company saw its quarterly share of production (40%) in the Khor Mor Field increase to 28,800 boepd as compared to 27,000 in 2Q 2013, due to resumption of LPG production which has seen a full restoration of production capacity. However, LPG sales continue to be constrained by under-lifting on the part of the Kurdistan Regional Government (KRG).
Arbitration update
On 13 July 2014, Dana Gas announced that it had received an award of interim relief by the London Court of Arbitration relating to the case it has filed against the KRG along with Crescent Petroleum and Pearl Petroleum Company Limited (collectively referred to as ‘the Consortium’). In its decision, the Tribunal of the London Court of Arbitration ordered KRG to restore the previous regular payments to the companies as of 21 March 2014, the date of the application and until the case is concluded.
