Dana Gas Q1 net profit halves to $6m

04/05/2016 20:26 AST

Abu Dhabi-listed energy firm Dana Gas reported a 50 per cent drop in first-quarter profit on Wednesday that it blamed on lower hydrocarbon prices and reduced output in Egypt and Kurdistan.

Dana made a net profit of $6 million in the three months to March 31. This compares with a profit of $12 million in the prior-year period, it said in a statement, and resumes an earnings slump.

In 2015, Dana Gas reported falling profits in the first and second quarters and losses in the third quarter before posting a big jump in profit in the final three months of last year after it booked a one-off gain relating to an arbitration case.

Dana's first-quarter revenue was $82 million, down from $115 million. Lower hydrocarbon prices accounted for $28 million of the revenue drop, it said.

Dr Patrick Allman-Ward, CEO of Dana Gas said: “The beginning of the year has been encouraging, with a good collections rate in both Egypt and Kurdistan despite the low oil price during the quarter, which should further improve revenues now that oil prices are already higher.”

“In Iraq’s Kurdistan Region, we have resumed full local sales and entered into a new agreement with the Ministry of Natural Resources to receive regular monthly payments. Furthermore, both the Khor Mor and Chemchemal Fields have had their reserves certified and we are pleased to report proven and probable resources are close to 1 billion barrels of oil equivalent as Dana Gas’ share, making these fields truly world class assets,” he added.

“Our operations in the UAE and Egypt are progressing well. In the UAE, we have commenced sales of gas from our Zora Gas Field in Sharjah,” Allman-Ward noted.

“And in Egypt during the quarter we have drilled and / or completed six successful development wells (including Balsam-4) and a new exploration well. All were successful and encountered gas bearing reservoirs on or above expectation. Two of the wells are already tied back and are producing with the remainder anticipated in the next two quarters. This should further boost production and expected revenues, and we expect to reach production capacity of our gas plant before year end,” he concluded.

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