Allman-Ward ... 'we are sensitive to oil prices'
Dana Gas Q3 profit up 36pc as costs fall
DUBAI, November 12, 2014
Abu Dhabi-listed Dana Gas reported a 36 per cent rise in third-quarter net profit as increased production and lower costs offset falling oil prices.
The Sharjah-based company, which has operations in Egypt, the UAE and Iraq’s Kurdistan region, made a profit of $38 million in the three months to September 30, up from $28 million in the year-earlier period.
“The gas we supply is at fixed prices and therefore the gas portion of our portfolio is not subject to sensitivity around oil prices,” Dana Gas chief Executive Patrick Allman-Ward told reporters.
“The liquid portion clearly is and provides a disproportionately large component of revenue and therefore profit. We are sensitive to oil prices and you will see that reflected in our financial position.”
Dana produced 68,700 barrels of oil equivalent per day (boepd) in the third quarter, up 3 per cent from a year ago.
The company has faced problems recovering payments from exploration and production assets in Egypt and Iraq's region of Kurdistan because of political turmoil in those countries. The company received $71 million in cash from operations and cash collections in the third quarter.
Dana will invest more than $350 million over the next three to four years to drill new wells and redevelop existing wells in Egypt, said Allman-Ward.
This will increase Dana’s Egyptian production to more than 50,000 boepd by 2017 from about 40,000 today. The company will keep all earnings from this increased production rather than splitting it with the government to reduce what the state owes.
Dana’s total receivables in Egypt were $276 million, of which $160 million were overdue. Allman-Ward said the total would fall to about $60 million by 2018.
He said he expects Dana to receive part of a $700 million payment by Egypt’s government to energy companies operating in the country due by year-end. This is the second tranche of a $1.5 billion payment announced in October.
In Kurdistan, Dana received an $18 million cash advance as part of its 40 per cent share in a project in the region. -- Reuters
