Dana Gas annual profits grow 20%
- United Arab Emirates: Sunday, February 03 - 2013 at 09:19
- PRESS RELEASE
Dana Gas PJSC, the Middle East's leading regional private sector natural gas company, has announced its preliminary financial results for the year ended 31st December 2012.
In 2012, the Company collected $301m (Dhs1.1bn) from its share of receivables in Egypt and Kurdistan Region of Iraq. The Company's cash balance improved by 47% to $165m (Dhs605m) by the end of 2012 compared to $112m at the end of 2011 (Dhs411m). Total assets at the end of 2012 increased to $3.5bn (Dhs12.8bn).
Gross revenues were slightly lower at $636m (Dhs2.3bn) compared to $690m (Dhs2.5bn) in 2011 reflecting the conservative cash policy implemented by the Company in Egypt, given the delays in collection of receivables, and also temporary suspension of Liquefied Petroleum Gas ('LPG') production in Kurdistan Region of Iraq following the damage to the LPG loading bay by a third party LPG tanker accident in June 2012. Revenues are expected to increase once new discoveries in Egypt are brought to production and the Kurdistan LPG loading bay is repaired by Q2 of 2013.
Commenting on the results, HE Dr. Adel Al-Sabeeh, Chairman of the Board of Dana Gas, said, "Despite regional challenges over the past year, Dana Gas has achieved strong profit growth of 20% in 2012, as well as strengthening the cash position, and growing our operations, with production growth in the Kurdistan Region and new discoveries in Egypt. This combined with the proposed sukuk refinancing result and the international and regional high growth levels forecast for the natural gas industry, gives us considerable optimism for the company's future, with our attention now firmly focussed on how best to realise the value for the shareholders."
In 2012, the Company's net production averaged about 60,000 barrels of oil equivalent per day from its interests in the Kurdistan Region of Iraq and in Egypt, where operations remain unaffected by the recent unrest in some other parts of the country. The decrease in Egypt production to an average rate of just over 32,200 barrels of oil equivalent per day is due to the conservative cash policy that Dana Gas has implemented resulting in lower capital expenditure, given the delays in receivables that the Company experienced after the recent political changes. Production levels in Egypt are expected to increase as the Company develops its three recently announced gas discoveries, and the Company is actively engaged in constructive discussions with the Egyptian authorities at high level to address the outstanding receivables in a short a time as possible.
In the Kurdistan Region of Iraq, the Company continued to increase overall production, achieving a net average rate to the company of 27,500 barrels of oil equivalent per day. LPG production in Kurdistan Region of Iraq is scheduled to resume in the second quarter of 2013 following completion of repairs to the LPG loading facilities, and the company is in discussions with the Kurdistan Regional Government to further expand production.
In the UAE upstream, agreement has been reached with the emirates of Sharjah and Ajman regarding development of the Zora gas field, located 33 kilometres off the UAE's coastline. The field will be developed using a single offshore platform linked to onshore processing facilities. Once on stream, Zora will provide a valuable source of gas for local power generation in the northern UAE.
With regard to receivables, Dana Gas collected a total of $143m (Dhs524m) of its share from Kurdistan Region of Iraq and $163m (Dhs596m) in Egypt. In December 2012, the Company's Joint Venture in the Kurdistan Region of Iraq received $120m (Dhs441m) from the payment made by the Federal Government of Iraq to the Kurdistan Regional Government, of which the Dana Gas share of 40% was $48m (Dhs176m). The Company continues to pursue outstanding receivables in Egypt and the Kurdistan Region of Iraq through high level, constructive discussions with the relevant authorities.
Rashid Al-Jarwan, Executive Director and Acting Chief Executive Officer of Dana Gas, added, "We are now preparing to develop our three recent discoveries in Egypt and the Zora offshore gas field in the UAE. We began production from our gas liquids extraction plant joint venture in Egypt in October 2012 and we continue to increase throughput and revenue from the plant. These projects will enable us to boost the growth that our operations have achieved consistently over the past seven years."
The fundamentals of the energy industry remain strong, with rising global demand for energy in general and natural gas in particular. The International Energy Agency (IEA) has forecast that Middle East gas demand is set to rise by 79 billion cubic meters, a 20% increase, from 2011 to 2017, outstripping incremental supply. Dana Gas has established itself as an important player in this market and is making a positive contribution to that growth.
The recent agreement on the Company's Sukuk reached with the Ad Hoc Committee of Sukukholders, which is subject to shareholder approval, will place Dana Gas on a stronger financial footing in the interests of all stakeholders. The Company is currently pursuing the steps necessary for seeking the consent of the shareholders, existing Sukuk holders and the approvals of the regulatory authorities, in order to successfully complete the Transaction during the second quarter of 2013.
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