Dana Gas PJSC, the Middle East’s largest regional private sector natural gas company, has announced its financial results for the quarter ended 30th June 2010.
Revenue from the sale of hydrocarbons increased to AED 428 million, with gross profit reaching AED 179 million. These figures represent increases of 41% and 84% respectively, compared to the same period last year. This is due to strong production growth, amounting in aggregate to 29%, from the Company’s operations in Egypt (where ten fields are now producing) and in the Kurdistan Region of Iraq, where production from the Khor Mor field continues to increase. It is also due to higher market prices for, condensate, LPG and oil during the quarter, as compared to 2Q 2009.
The Company made a Net Profit after tax of AED 33 million in the second quarter. On an “underlying” basis this Net Profit after tax has increased by some AED 62 million compared to 2Q 2009.The underlying basis strips out significant “one off” items in the second quarter 2009 results (chiefly the sale of a 10% interest in Pearl Petroleum, which holds our interests in the Kurdistan Region of Iraq (“KRI”), exploration expenses and impairments) and is intended to provide for a more meaningful comparison.
The Net Profit after tax for 2Q 2010 excludes an unrealized loss of AED 213 million, due to a decline in the value of the Company’s investment in MOL (the Hungarian oil and gas company, who are one of our partners in Kurdistan), booked directly to equity in line with the Company’s published accounting policy and reported within “Comprehensive Income” However, on a cumulative basis, the Company has recorded a total unrealized gain on this investment, from the date of acquisition to the end of June 2010, of AED 297 million.
Earnings before interest, tax, depreciation, amortization and exploration (EBITDAX) for 2Q 2010 were AED 252 million.
Dana Gas Egypt’s operations continue to deliver strong results, producing 3.80 million barrels of oil equivalent (boe) during 2Q 2010, an increase of 19% compared to the same period last year. This included production from the Orchid field, which was brought on stream in April 2010. The Company also added its third new field gas discovery of 2010, Ward Delta-1 in the Nile Delta, which follows on from the El Panseiya-1 and South Faraskour-1 discoveries in the first quarter. This continues the Dana Gas exploration track record with three discoveries from four wells in the first half of 2010, building on the 2009 performance of eight discoveries from twelve exploration wells.
In the Kurdistan Region of Iraq Dana Gas, through its 40% share, produced 1.06 million boe of gas and condensate during the quarter, an increase of approximately 88% over the same period in 2009. The first train of the LPG Plant at Khor Mor is in partial operation, producing gas and condensate. Production of LPG will start later in 2010, which will further increase production.
Dana Gas is pleased to report that it has recently been recognised as a “First Category” company by the Securities and Commodities Authority (SCA) reflecting the Company’s adherence to the transparency requirements of the SCA, compliance to its laws and regulations, in addition to its accessibility to all stakeholders.
Commenting on the quarterly performance, Dana Gas Chief Executive Officer, Mr. Ahmed Al-Arbeed, said: “I am pleased to report that Dana Gas has delivered another consecutive quarter of good financial results. In Egypt, our development programme continues to bring our gratifying stream of undeveloped discoveries into production and our fourteen well exploration programme for 2010 continues to deliver class leading results with three discoveries from our first four wells. We continue to target a 20% increase in production for the full year compared to 2009 and, with the majority of our exploration drilling in the second half of the year, I look forward to hopefully being able to bring more positive news.”
“In the Kurdistan Region of Iraq, production continues to grow as we supply gas to meet the demands of the Erbil and Bazian power stations and it remains a source of pride to Dana Gas that this region of Iraq is one of the few with a reliable electricity supply. We are producing gas and condensate through our new permanent facilities and the first train of the LPG plant at Khor Mor will commence LPG production shortly. Consequently, Dana Gas’ growth is set to continue.” said Mr. Al-Arbeed.
James Dewar, Chief Financial Officer said “We have again delivered a profit with minimal exceptional items, in line with expectations, which reflects Dana Gas’ sound financial and operational platform. We are a growing Company and this stable base will ensure that as our production volumes increase, so should our profitability and cash generation”.