Dana Gas Q1 profit rises 17%

Dana Gas announced today its financial results for the first quarter ended 31 March 2013 with a net profit after tax of Dh241 million ($66 million), an increase of 17 per cent as compared to Dh206 million ($56 million) in Q1 2012. Revenue from the sale of hydrocarbons during Q1 2013 was Dh557 million ($152 million).

The company's revenues and gross profit declined during Q1 2013, owing to a conservative cash policy towards capital expenditure and a temporary suspension of Liquefied Petroleum Gas production in Kurdistan Region of Iraq.

Revenues and gross profits are expected to increase as new discoveries in Egypt are brought to production and upon resumption of LPG production in Kurdistan in June 2013 following completion of repairs to the LPG loading bay.

Adel Al-Sabeeh, Chairman of Dana Gas, said: "Our disciplined approach and long-term business strategy has allowed Dana Gas to achieve an encouraging first quarter while completing the refinancing of the sukuk and posting an increase in net profit. We are committed to expanding regionally and were successful in our bid to be awarded an oil and gas prospecting project in northern offshore Egypt as well as pre-qualifying in Lebanon’s first offshore licensing round."

Rashid Al-Jarwan, Executive Director and Acting Chief Executive Officer of Dana Gas, added: "We have had an active start to the year. Egypt and Kurdistan have increased their quarterly production as we brought on stream discoveries, added compression facilities to enhance current production. These developments, combined with the completion of the sukuk refinancing has meant we can approach the rest of 2013 with renewed confidence and ensure our future growth plans deliver value to our stakeholders."

The Group’s net production averaged 61,400 barrels of oil equivalent per day (boepd) from its interests in Egypt and the KRI during the three months ended 31 March 2013.

Dana Gas Egypt produced gas, LPG, condensate and crude oil at an average rate of 33,200 boepd in the first quarter of 2013. This is up on Q4 2012 from an average rate of 32,700 boepd aided by West Sama-1 and Allium-1 fields in Egypt commencing commercial production in early March. When both fields achieve full capacity output, they are expected to add 3,450 boepd (20 MMcf/d).

The Egyptian Bahrain Gas Derivatives Company "EBGDCo" -in which Dana Gas interest is 26.4 per cent- Natural Gas Liquids (NGL) extraction plant at Ras Shukheir, Egypt processed a combined 8163 metric tonnes of Propane (7765) and Butane (398) in Q1 2013.. The average gas flow-rate for the quarter was 90 million standard cubic feet per day (mmscfd) with recovery rates of 98.9 per cent and 99.9 per cent respectively.

Egypt’s West El Manzala Concession has seen a number of operational activities completed during Q1 2013. The South Abu El Naga wells, discovered in May 2011 with a reserve minimum estimate of 50 billion standard cubic feet (Bcf) of gas, have completed further well tie-ins.

The El Basant gas fields, first discovered in 2009 with an estimated gas reserve of 123 billion Bcf, has finalized the overhaul of its gas compressor units and the Balsam-1 field, the third discovery in 2012, is now ready to start commercial production, with its gas being routed through El Westani gas plant. Together, these operational activities will result in a significant increase in gas production which will directly increase both Dana Gas Egypt and the Group’s overall net production figures in 2013.

In the Kurdistan Region of Iraq, the Company’s 40 per cent share of production in the Kor Mor Field for Q1 2013 was 27,700 boepd, as compared to 28,500 boepd during the same period last year. However, Production was up 3 per cent on quarter by quarter basis. Production is expected to increase once LPG production is resumed after repairs to the loading bay are complete by the end of Q2 2013.

Daily production reached a peak rate of 88,000 barrels oil equivalent per day (boepd), averaging 80,000 boepd, which includes 340 million cubic feet of gas per day and 15,000 barrels per day of condensate liquids. There are plans for further expansion in investment and production levels, under discussion with the Ministry of Natural Resources.

Dana Gas Egypt was a successful bidder in the Egyptian Natural Gas Holding Company 2012 International Bid Round that took place on 18th April 2013. It was awarded 100 per cent working interest in the North El Arish Offshore (Block 6) concession area. Upon completion of the necessary procedures, the concession will be handed over to Dana Gas in Q4 2013, whereby it will start the appraisal process.

The company has also been pre-qualified as a non-operator in Lebanon’s 1st Offshore Licensing Round where 10 deep water exploration blocks are available.

Group cash balances as of 31 March 2013 stood at Dh1,254 million. The significant rise in cash balances follows the one-off proceeds from the partial monetisation of Dana Gas’ MOL stake. In February 2013, the Company sold 1.675 million shares, raising Dh495 million.

The Company’s overall net trade receivables number, as of 31 March 2013, stands at Dh2.3 billion.

During the first three months of 2013, the Group collected Dh152 million of receivables in Egypt. Revenue collection is 100 per cent and the trade receivable balance stood at Dh866 million.

In Kurdistan, the Group collected Dh119 million of its 40 per cent share of receivable in KRI. Revenue collection is 56 per cent and the Group’s share of the trade receivable balance stood at Dh1,389 million as of 31 March 2013.

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