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Dana Gas reports strong profit growth for Q1 2012
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Friday, 18 May 2012
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Dubai Dana Gas reported 125% jump in its Q1 net profits reaching AED 206 million for the Q1 of 2012 up from AED 92 million recorded during the corresponding period last year.

Gross revenue increased 14% to AED 700 million up from AED 616 million while gross profit grew 34% to AED 451 million up from AED 337 million. Its production however declined 5.5% to 63,000 barrel of energy per day from 66,800 barrel of energy per day.

Net profit rose principally from higher realized hydrocarbon prices during the quarter. The net profit excludes an unrealized gain of AED 135 million on Dana Gas’s 3% shareholding in MOL, the Hungarian listed oil and Gas Company and a strategic partner in Dana Gas’s Kurdistan Region of Iraq operations.

This gain is booked directly to equity in line with the company’s published accounting policy, resulting in total comprehensive income for Q1 2012 of AED 341 million. Group cash balances as at 31 March 2012 stood at AED 524 million.

Dana Gas’s cash flow has been impacted by global macroeconomic and regional events. The revolution in Egypt last year and the subsequent unfolding turmoil in Egypt resulted in sporadic and progressively delayed payment of revenue by government owned entities.

Similarly, political disputes in Iraq have impacted planned payments by the central government to petroleum companies operating in the KRI. Despite these challenging external macroeconomic circumstances, Dana Gas hopes that these problems will resolve themselves in the short and medium term.

The company’s USD 1 billion sukuk, secured against certain Egyptian assets as well as SajGas and UGTC are due to mature on October 31st 2012. Although the economic realities outlined above affected Dana’s ability to rise new funding it is committed to finding a consensual solution that is equitable to all stakeholders.

For these purposes, the company has appointed Deutsche Bank, Blackstone Group and Latham and Watkins as its financial and legal advisors to advice on various options for discussions with the sukukholders and their advisors. The Company will provide further updates as further progress is made.

Earnings before interest, tax, depreciation, amortization and exploration were AED 459 million compared to AED 403 million in the Q1 of last year an increase of 14%. The revenue collections attributable to the group during the quarter were AED 335 million of which AED 192 million was collected in Egypt and AED 143 million representing the company’s 40% share of collections in KRI.

Mr Hamid Jafar Board Chairman of Dana Gas said that “Our revenue collections were in line with expectation and we continue to have constructive discussions with both the Government of Egypt and the Government of the Kurdistan Region of Iraq on payment of Company’s receivables. Overall however, this has been a reasonable quarter financially and we look forward to the rest of the year with renewed confidence.”

Mr Ahmad Al Arbeed CEO of Dana Gas said that “Good progress is being made on our drilling programme in Egypt, with one new field discovery in the South of the country. We plan to drill further exploration and development wells in Northern Egypt. I am also pleased to report that the commissioning and start-up of the Natural Gas liquids plant in Ras Shukheir is advancing well and should be operational in Q2 of this year.”

Source - Gulf News

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