Dana Gas achieves revenue of Dhs901m in first nine months

Earnings before Interest, Taxes, Depreciation, and Amortization (EBITDA) reflecting cash flows from operations for the third quarter of 2008 increased by 32% to Dhs145m compared to Dhs110m in the same period last year. Net profit for the quarter was Dhs26m as compared to Dhs22m in the same period last year, an increase of 18 percent after finance charges of Dhs65m, non-cash depreciation and depletion of Dhs73m and income tax expense of Dhs39m during the quarter. Total assets as of 30 September 2008 stood at Dhs10.8bn.

Dana Gas' oil and gas production in Egypt ended the quarter with a production of 2.57 million barrels of oil equivalent (boe) and contributed higher revenues due to better realizations of LPG and condensates.

The Company generated total revenue of Dhs901m for the nine-month period ended 30 September 2008, with a gross profit of Dhs200m, net profit of Dhs85m and EBITDA for the first nine months was at Dhs451m, an increase of 50 percent over the same period last year.

Commenting on the nine months' results Mr Hamid Dhiya Jafar, Executive Chairman of Dana Gas said, "The current period of growth has been of great significance to Dana Gas with production start up from its Kurdistan Gas Project, combined with an important discovery in Egypt. The first phase of the Kurdistan Gas Project has been completed in a record time of 15 months with installation of an Early Production Facility (EPF) and a 180 kilometre pipeline to transport our produced gas to a newly constructed power plant at Erbil. The gross operated gas production from operations in Egypt and Kurdistan Region of Iraq has now reached 220 million standard cubic feet per day (mmscfd), totaling more than 40,000 barrels of oil equivalent (boe) per day.

"We now look forward to completing installation of the additional processing facilities in order to increase the production in Northern Iraq to 150 mmscfd early next year and then to 300 mmscfd later in 2009. Work is also progressing in Egypt to obtain Government approvals to bring our new gas discovery in Egypt, Al-Tawil, on stream in early 2009. In addition, in the UAE we are moving ahead with plans for exploration and development of the Western Offshore concession in Emirate of Sharjah which includes the development of the Zora Gas field by mid 2009," added Mr Jafar.

Neeraj Agrawal, Dana Gas Finance Director, elaborated on the Company's financial results, saying, "Dana Gas has not been negatively impacted by the recent global financial crisis as it has maintained a good level of liquidity and has cash reserves and positive cash flows to support the ongoing project and drilling expenditures.

"As of 30 September our cash and bank balance stood at Dhs1.18bn and during the nine months ended the Company generated EBITDA of Dhs451m,"

he added.

In the Kurdistan Region of Iraq, Dana Gas was able to complete the 180 km gas pipeline in late September. The initial processing facilities were successfully installed with gas deliveries to the Erbil Power Station commencing on 1 October via the 180 km pipeline.

In Egypt, Dana Gas recently announced a significant gas discovery at Al Tawil in the Nile Delta in Egypt; the well was tested at a rate of 23.5 mmscfd of gas and 1,027 barrels of condensate per day (totaling approximately 5,000 boe per day). This discovery is particularly important as the well produced condensate at higher levels than existing producing wells and so will add materially to the Company's overall liquid production.

The UAE Gas Project to process and transport imported gas is now in its final stages of completion. The construction and interconnection of the Company's facilities in the UAE had been successfully completed in 2005 and awaits the commencement of gas supplies. The ultimate supplier of gas, NIOC, has completed the installation of all the main components of the required upstream facilities and is in final commissioning stages.