Tuesday, 30 November, 2021

Dana Gas swings to $279m record net profit in 9 months

DUBAI: Sharjah-based Dana Gas, one of the largest private natural gas companies in the region, swung to a record net profit for the nine months ended September 30 on higher oil prices, improved operational performance and other income.

The company posted a $279 million net profit for the January to September period compared with a loss of $379m in the same period last year, it said in a statement to the Abu Dhabi Securities Exchange, where its shares are traded. The net profit included “other income” of $608m and a $78m reversal of impairments related to Egypt assets, the company said on Sunday, report agencies.

Revenue for the first nine months increased 27 per cent to $334m compared with $262m in the same period last year, supported by higher oil prices and higher production in the Kurdistan region of Iraq (KRI).

Dana Gas also reported a net profit of $140m for the three months to the end of September compared with a net loss of $360m in the same period last year. This included an impairment of $373m in respect of its Egyptian assets, according to the filing.

Oil prices have rebounded as demand for crude surges on the back of a strong recovery by the global economy, which slumped into its deepest recession since the 1930s amid the pandemic.

Oil demand in 2021 is expected to grow by 5.8 million barrels per day, with global consumption hitting 96.6 million bpd, Opec data released last month showed.

“The steps the company has taken to increase production and reduce its cost structure and the progress it has made in increasing collections has well-positioned Dana Gas to benefit from rising energy prices and create shareholder value,” Patrick Allman-Ward, chief executive of Dana Gas, said.

“Operationally, the company’s production in the KRI grew by 7 per cent and is on track with its expansion plans, with first gas from the KM250 project scheduled for April 2023. In Egypt, a five-well drilling programme has concluded and the additional production has almost entirely offset natural well declines.”

The board of Dana Gas proposed a 27 per cent increase in annual dividend and called for a general assembly on December 9 to approve the new dividend policy.

Oil and gas production in the first nine months of the year rose to 63,200 barrels of oil equivalent per day, compared with 63,000 boepd for the same period last year.

The small rise in output was due to the company’s Kurdish assets, which helped offset declines in Egypt. Production from Iraqi Kurdistan rose 7 per cent to reach 34,000 boepd, while output from Egypt fell 4 per cent to 29,200 boepd due to natural field depletion.

Collections from both regions for the first nine months of 2021 increased 102 per cent year on year to $256m from $127m in the same period last year, the company said.

In Iraq, Dana Gas saw its share of collections from sales of condensate, LPG and gas rise 77 per cent to $131m in the first nine months of 2021 over the same period the previous year.