Dana Gas, the Middle East’s largest regional private sector natural gas firm, has seen a 24% fall in first-quarter net profit to AED139 million ($38 million) compared to Q1 2023 earnings of AED183 million. 

 

This was mainly due to lower realised hydrocarbon prices during the period compared to Q1 2023. The firm had generated revenue of AED356 million in Q1. 

 

The Egyptian Cabinet, in early March, approved a draft law authorising the Minister of Oil and Egyptian Natural Gas Holding Co (EGAS) to enter into a new Concession Agreement with Dana Gas, as a key part of its consolidation plan. The company expects parliamentary ratification of the law in the coming weeks. 

 

Drone attack

On April 26, a condensate storage tank at Khor Mor was struck by a drone attack leading to an immediate suspension of production. Production was fully restored in a matter of days following concrete actions by the Government of Iraq and Kurdistan Regional Government (KRG), including firm commitments to significantly enhance security and strengthen defences at the Khor Mor site. 

 

This incident may potentially impact the completion schedule of the KM250 project. The Company continues to monitor the situation and will provide further updates to the market in due course.

 

Richard Hall, CEO of Dana Gas, said: “It saddens me greatly to report the tragic fatalities and injuries following an incident at our Khor Mor field. We express our deepest condolences to the families. The gas plant was temporarily taken offline as we sought commitments for additional security measures from the Governmental authorities before fully restoring production. 

 

Improving receivables

“Prior to the incident, we realised profits during the quarter despite lower condensate prices and reduced output from Egypt. In the KRI we posted strong production numbers as our plant continues to produce above the 500 mmscfd level it had reached at the end of last year. We have also made significant progress in improving our receivables in the KRI as a result of the new payment mechanism registered last year, which continues to operate seamlessly. This has allowed Pearl to resume dividend payments to the company. 

 

Operations & production

Group production in Q1 2024 averaged 56,750 boepd, a 10% decrease compared to 62,900 boepd in Q1 2023, and a 2% increase on a quarter-on-quarter basis. KRI production was flat year-on-year at 38,600 boepd, continuing the momentum from the end of last year when it achieved record gas output of 520 mmscfd. Production in Egypt declined 25% to 18,150 boepd in Q1 2024 from 24,200 in Q1 2023 due to natural field declines.

 

Liquidity 

The company’s cash position as of March 31 stood at AED513 million, including AED425 million held at the Pearl Petroleum joint venture. 

 

The group collected a total of AED279 million during the first quarter, with the KRI and Egypt contributing AED246 million and AED33 million respectively. 

 

The company has been receiving dividend payments from Pearl in the first quarter following the implementation of the new payment mechanism with the KRG last year. This has ensured timely payments to Pearl and gradual settlement of past receivables.

 

The company’s receivables in KRI stand at AED334 million and in Egypt at AED209 million at the end of the quarter.--TradeArabia News Service