Dana Gas, the Middle East's regional private sector natural gas company, reported a 3 per cent net profit increase in Q2 2024, reaching AED124 million ($34 million ) compared to AED121 million ($33 million) in Q2 2023, primarily driven by improved gross profit margins.

 

The improved margins helped offset the 7 per cent drop in revenue during the same period due to lower realized prices.

 

Revenue in H1 2024 reached AED 696 million ($190m), compared to AED 814 million ($222m) in H1 2023 resulting in net profit of AED 263 million ($72m) given the lower realised prices in the Kurdistan Region of Iraq (KRI), alongside lower production outputs in Egypt.

 

KM250 UPDATE

 

Following the drone attack on the Khor Mor facility on April 26, 2024, concerted efforts between Dana Gas and its partners are ongoing towards setting a swift completion date for the project.

 

The Company will update the market in due course on the revised completion date and impact on costs.

 

EGYPT CONSOLIDATION

 

In early March, the Egyptian Cabinet approved a draft law authorising the Minister of Oil and the Egyptian Natural Gas Holding (EGAS) to finalise a new Concession Agreement with Dana Gas.

 

The agreement is a part of a strategic consolidation plan designed to enhance the life of assets in Egypt towards maximising stakeholder value over the coming years.

 

The revised terms should enable meaningful future investments alongside a resumption of drilling activities, positively impacting the Company’s production levels in Egypt and helping the Country meet its growing gas demand. The new agreement has been ratified by the Egyptian Parliament.

 

Richard Hall, CEO of Dana Gas, said:“Thanks to a newly established payment mechanism with the local government, we have seen significant improvements in our receivables in the KRI, receiving regular payments since November 2023 and effectively reducing past receivables. Increased production output in the KRI, driven by higher demand from local power plants, has bolstered our operational performance. Coupled with robust hydrocarbon prices, we achieved a strong financial performance despite lower condensate prices and reduced output from Egypt.

 

We are dedicating all our efforts on behalf of the KRG and the people of Kurdistan to enable the earliest resumption by Pearl of KM250.

 

Looking ahead, reflecting our commitment to our Shareholders, we are optimistic about the remainder of 2024 and look forward to resuming dividend payments as soon as feasible.”

 

OPERATIONS & PRODUCTION

 

The Group’s overall production in H1 2024 averaged 55,250 boepd, a 7 per cent decrease compared to 59,800 boepd in H1 2023. KRI production grew 3 per cent to 37,600 boepd, driven by higher gas volumes supplied to local power plants in response to increased demand. This continues the momentum from the previous year, when the Company achieved a record gas output of 520 MMscf/d.

 

Production in Egypt declined 25 per cent to 17,650 boepd in H1 2024 from 23,400 in H1 2023, primarily due to natural field declines. However, the ongoing consolidation efforts are set to bring new production streams online, which are expected to significantly enhance the Company’s capacity and operational efficiency in the country.

 

LIQUIDITY

 

The Company’s cash position as of 30 June stood at AED 513 million ($140m), including AED 403 million ($110m) held at the Pearl Petroleum joint venture.

 

The Group collected a total of AED 557 million ($152m) during the first half of the year, with contributions from KRI and Egypt at AED 480 million ($131m) and AED 77 million ($21m) respectively. The Company received an AED 154 million ($42m) dividend from Pearl Petroleum during this period.

 

The Company’s receivables in KRI were reduced to AED 297 million ($81m) and in Egypt at AED 220 million ($60m) at the end of the first half.

 

The Company’s balance sheet has grown stronger as a result of proactive measures that reduced corporate debt by AED 95 million ($26m) during the first half of 2024. --TradeArabia News Service