Dana Gas Q3 profit rises on higher production

Dana Gas, the UAE energy firm, reported a 36 per cent rise in third-quarter net profit on Wednesday as production increased and it reined in costs.

The Sharjah-based company made a profit of $38 million (Dh139.46 million) in the three months to September 30, up from $28 million (Dh102.76 million) in the year-earlier period.

Dana has faced problems recovering payments from exploration and production assets in Egypt and Iraq's region of Kurdistan because of political turmoil in those countries. The company received $71 million in cash from operations and cash collections in the third quarter.

It collected $53 million from Egypt, of which $36 million was in Egyptian pounds earmarked to settle overdue payables to service providers for its Egypt operations, and $11 million was ring-fenced for funding a previously announced project in Egypt.

In Kurdistan, Dana received an $18 million cash advance as part of its 40 per cent share in a project in the autonomous region.   

In the nine month period ended September 30, 2014, Dana Gas reported a 16 per cent increase in revenue to $541 million as compared to $466 million the previous year.

Net profit in the nine month period of 2014 was also high at $129 million as compared to $121 million for 2013.

Profit from operations was higher by 57 per cent to $129 million as compared to $ 82 million that was achieved in 2013, if a one-off gain of $39 million following the partial sale of MOL shares in H1 2013 is excluded. Production was up 11 per cent at 70,500 barrels of oil equivalent per day (boepd) as compared to the average daily production of 63,400 boepd achieved in 2013.

Dana Gas signed the Gas Production Enhancement Agreement (GPEA) on September 30, 2014 with the Egyptian government.

As part of the work programme commitment, Dana Gas will drill over 20 new development wells and conduct a similar number of work-overs of existing wells. The estimated incremental production during the period will be approximately 270 billion cubic feet of natural gas, 8 to 9 million barrels of condensate and around 450,000 tons of LPG.

On a year-to-date basis, the company has a total of $99 million in cash.

Follow Emirates 24|7 on Google News.