Dana Gas builds strong foundations for growth

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The year 2007 saw Dana Gas achieve its first revenues and operating income, as well as make important new entries into all areas of the natural gas business in Egypt and Northern Iraq, while building upon its positions and assets in the UAE.

The Company grew from a small team in Sharjah to a staff of over 400 professionals in a network of offices across the Middle East and worldwide.

The year also witnessed a rise in world oil prices, and a growing interest shown by international investors in the energy sector of the Middle East Region.

'With oil prices now over $100 per barrel and increasing interest in the energy sector worldwide and especially our region, Dana Gas is the only publicly-listed gas resource company in the Gulf, and has already established strong positions in the UAE, Egypt and Iraq, in all areas of the natural gas business - from exploration and production, to processing and pipeline transmission, and through to gas marketing and downstream projects,'

said Hamid Jafar, Executive Chairman of Dana Gas, in his report to the AGM on behalf of the Board of Directors.

Some of the highlights of Dana Gas' achievements over the past year which were reported at the meeting included: the Company's highly successful $1bn Convertible Sukuk issue; the signing of a major agreement for development of the Sharjah Western Offshore Concession; rapid progress in developing two of Iraq's major gas fields in the Northern Kurdistan Region for supplying local power needs; historic commercial oil discoveries in Southern Egypt as well as natural gas and condensate discoveries in the Nile Delta, exceeding the company's 2007 production goals; finalising readiness for the transportation and processing of imported natural gas in the UAE; the formation of a joint venture with Emarat of the UAE to own, manage and operate the Middle East's first common user gas pipeline; the announcement of a strategic co-investment agreement with the Arab Petroleum Investments Corporation (APICORP); and a strategic alliance with leading private equity firm Abraaj Capital to jointly invest in natural gas projects.

Dana Gas ended the year in a healthy financial position, with revenues in excess of Dhs1bn, cash from operations of Dhs478m, and total assets grown by 59% from the previous year, to Dhs10.8bn.

The Company's share price rose by 72% over the previous twelve months, outperforming the market index.

The Company also presented its growth plans and outlook for the coming year:

'For 2008, Dana Gas aims to build on the strong foundations of 2007. In addition to the expected start-up of operations and revenues from both the import of Iranian gas and the Kurdistan region's gas projects by the middle of this year, the Company is also implementing an active $170m drilling campaign of 19 new wells in Egypt, where we hope to increase our gas reserves to significantly increase production, and take full advantage of high energy prices,' reported Executive Chairman Hamid Jafar, who added:

'In addition to our major investments and expansions in Egypt, Northern Iraq, and here in the new concession offshore Sharjah, we will also be expanding our unique concept of developing 'Gas Cities' in other countries of the Region, and pursuing further opportunities and acquisitions currently under active study in the Gulf Region and in North Africa'.

The AGM also approved the audited accounts for the period ended December 31, 2007, and the auditors' report.