Backed by high oil prices and a robust operational performance, Dana Gas, the Middle East’s largest private sector natural gas firm, saw its first-half (H1) net profit shoot up 82% to AED407 million ($111 million) or 5.8 fils per share.

 

The profit rise is compared to an adjusted net profit (excluding reversal of impairment) of AED225 million in H1 2021. 

 

The gains in Dana Gas’s profitability in the first half were driven by elevated hydrocarbon prices, the company’s continued commitment to maintaining a low-cost base and strong operational performance in the Kurdistan Region of Iraq (KRI). 

 

Revenue increases 31pc

The company’s revenue for the first six months of the year increased 31% to AED1,04 billion as compared to AED792 million in H1 2021 and its operating costs dropped 16%. The company’s realised prices during the first half of the year averaged $87/bbl for condensate and $44/boe for LPG compared to $48/bbl and $32/boe respectively in H1 2021.

 

Despite the challenging security situation, the company’s current operations in the KRI have continued uninterrupted. Production from the KRI increased 1% in the first half and the KM250 expansion project has progressed well. During the first half, drilling of the project’s first development well was completed, and drilling operations for the second well are currently in progress. 

 

Whilst EPC construction work on KM 250 was suspended in June amid heightened security concerns, the company is working with the authorities to address security concerns and to resume construction. 

 

Maintaining dividend

Given the strong operational and financial performance the board expects to maintain its semi-annual dividend payment in keeping with the company’s dividend policy.   The interim dividend will be decided by the board at its meeting in September.

 

Dr Patrick Allman-Ward, CEO of Dana Gas, commented: “Dana Gas delivered strong half year results, supported by our robust operational performance, low-cost base and favourable energy market conditions. Despite an increased uncertainty around the global economy amid high inflation, the outlook for the remainder of 2022 is still encouraging with both energy prices and demand remaining high.”

 

Operations and production

The group’s overall production in H1 2022 was  61,100 boepd, a 5% reduction from 64,000 boepd in H1 2021. This was due to a 9% production drop in Egypt mainly as a result of natural field decline. Production output in the KRI increased by 1%, with production averaging 34,500 boepd in H1 2022 versus 34,300 in H1 2021. 

 

Operations have continued as normal during the period. Heightened uncertainty in the region and subsequent precautionary security measures have impacted the Khor Mor expansion project. 

 

As a result, the KM250 project remains on temporary suspension. The Company and its partners are working closely with the KRG to address all concerns and all parties remain committed to implementing the expansion project and resume construction activities as soon as possible. 

 

Liquidity and collections

The company’s cash position at the end of H1 2022 stands AED759 million including AED436 million held at the Pearl level. 

 

The group collected a total of AED660 million during H1 2022, with the KRI and Egypt contributing AED495 million and AED165 million respectively.-- TradeArabia News Service