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Dr Patrick Allman-Ward

Dana Gas H1 net profit surges 483pc to $140m

, August 7, 2019

Dana Gas, a leading natural gas company, has posted a net profit of $140 million (Dh513 million) in the first half (H1) of the year compared with $24 million (Dh88 million) in H1 2018, marking an increase of 483 per cent.

This was mainly due to the recognition at fair value of certain reserve based earn out entitlements amounting to $71 million. These are due from certain shareholders in Pearl Petroleum as considerations linked to the original share sale agreements, which were contingent upon proving up additional reserves in Pearl Petroleum which were confirmed by the recent independent reserves report by Gaffney Cline.

Excluding the reserve based earn outs of $71 million, net profit from core operations increased by 187 per cent to $69 million (Dh253mm) versus $24 million (Dh88mm) in H1 2018. This was principally due to an increase in KRI production post debottlenecking which added $20 million (Dh73mm), Sukuk profit savings and reimbursement of arbitration costs, reflecting the company’s solid operational performance.

Revenue for the first six months of the year advanced 3 per cent to $242 million (Dh887mm) as increased production in the KRI added $27 million (Dh99mm) to the topline which was partially offset by $15 million (Dh55mm) in reduced revenue due to price declines and $5 million (Dh18mm) due to lower production in Egypt.

Dr Patrick Allman-Ward, CEO of Dana Gas, commented: "Dana Gas’s net profit of $140million in the first half 2019 is a clear reflection of the company’s strong operational and financial performance with strongly rising production and revenues from the KRI. An independent certification exercise has shown a 10 per cent increase in the company’s 2P reserves in the KRI to over 1 billion boe. This external reserve auditor‘s report confirms our view that the Khor Mor and Chemchemal Fields are world class and are probably Iraq’s biggest gas fields.”

The company’s average production in H1 2019 was 68,200 boepd, a 7 per cent increase as compared with 63,600 boepd in H1 2018. Output in the KRI was up significantly to 32,400 boepd in H1 2019 compared to 26,100 boepd in H1 2018, while Egypt output was 4 per cent lower at 34,100 boepd during the same time frame.

In the KRI, the company billed $81 million (Dh297mm), and the full amount has been paid. The company also received a $49 million (Dh180mm) dividend from Pearl Petroleum in H1 2019 compared to $44 million (Dh161mm) in H1 2018. In Egypt, it billed $58 million (Dh213mm) and collected $81 million (Dh297mm) in payments, reducing our receivables to $117 million (Dh429mm). This represents a 42 per cent drop compared to same period last year and at its lowest position since 2011. - TradeArabia News Service




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