Dana Gas posts 35% rise in profit

Sharjah-based Dana Gas, the Middle East's first privately owned natural gas producer, said first-quarter revenue – mainly from its Egyptian operations – rose 35 per cent on higher prices.

Revenue was Dh272 million, it said. Net income in the three months to March 31 was up 19 per cent to Dh25m, compared to Dh21m in the year-earlier period, Executive Chairman Hamid Dhiya Jafar said.

"The growth was mainly driven by an increase in oil prices that have resulted in high returns," Finance Director Neeraj Agrawal said.

Shares of Dana, which are listed on the Abu Dhabi Securities Exchange, have fallen 6.9 per cent this year, after rallying almost 39 per cent in 2007. Kuwaiti investment bank Global Investment House this month started coverage of Dana with a "buy" rating and a price target of Dh2.86 per share. The stock closed yesterday at Dh2.03.

First-quarter output at Dana's Egyptian gas fields held steady at about 30,000 barrels of oil-equivalent per day (boepd), Agrawal said. The rate is not expected to change this year, he said.

A project to produce and process gas in Iraq's Kurdish region is expected to be completed by the end of July and contribute to profit in the third quarter, he said, without being more specific.

The firm, which attracted $78 billion (Dh286bn) of funds when it sold shares in an 2005 IPO, is due to award a construction contract to the Egyptian-Bahraini Gas Derivatives Company to build a $75m liquefied petroleum gas plant in the second quarter, from which production will start by the end of next year, Agrawal said.

Dana Gas said in January it plans to invest about $500m in Egypt and Iraq's Kurdish region this year.

Crescent Petroleum, a shareholder in Dana, is to start receiving gas from Iran as soon as the Iranians complete the final phase of offshore infrastructure, Agrawal said, denying reports of a price dispute. "We think they will complete the final phase by the third quarter," he said. "There is no price dispute because there is a binding agreement… but Crescent is now negotiating ways to get more gas to get a better price."

Last month, Iranian Oil Minister Gholamhossein Nozari said the country was serious in its threat to use domestically the gas it planned to provide to Crescent if a long-running dispute with the firm over price was not resolved. (Reuters)