Dana Gas profit jumps 15% in 2015
The Dana Gas plant in Egypt. The firm received Dh458 million in cash and offset payments from the Egyptian government in 2015, helping reduce its trade receivables to Dh810 million.
Dubai - Decline in global oil prices erodes gas firm's revenues and gross profit
Dana Gas, a publicly listed UAE natural gas company, on Sunday reported a 15 per cent rise in net profit for 2015 despite lower oil prices.
The company's full year net profit increased to Dh528 million from Dh457 million in 2014. But gross revenues and gross profit fell to Dh1.5 billion and Dh463 million respectively from Dh2.5 billion and Dh1.1 billion for the full year 2014.
"The fall in revenue and gross profit was directly attributable to the sharp decline in world oil prices last year, as well as a 15 per cent production decline in Egypt," the company said in a statement.
Dana Gas' year-end cash and bank balance stood at Dh1.7 billion, up from Dh674 million at end 2014. The key contributor to this increase was the cash received from RWE in November in consideration of the agreed settlement of the arbitration and sale of five per cent interest in Pearl Petroleum Company Limited.
"This offset a declining cash position caused by continued deficient payments from Kurdistan in combination with ongoing overhead costs and investment requirements in Egypt and the UAE," said the statement.
The company ended the year with an average total production of 63,900 barrels of oil equivalent per day, a seven per cent decrease compared to 68,900 boepd at end 2014, although production in Kurdistan saw an increase of 800 boepd (three per cent) of production.
Dr Patrick Allman-Ward, Dana Gas CEO, said despite the challenging business environment with the fall in oil prices, Dana Gas reported healthy financial results, including higher net profit, a significantly improved reserves position and positive outcomes in arbitration cases.
"We have made solid progress in further cutting costs, increasing operational efficiencies and bringing on-stream new fields in the UAE and Egypt, and have strengthened our management team during the course of the year with the appointment of a new technical director and chief financial officer."
"Looking ahead, we expect to see increases in production levels and resulting cash flows, particularly in Egypt and also in the UAE with the anticipated start-up of the Zora field. Together with our overall reduced spending levels and healthy cash position, this means that Dana Gas is well positioned to face the challenges of the current lower oil price environment and is prepared for the future upturn," said Allman-Ward.
Dana Gas received Dh458 million in cash and offset payments from the Egyptian government, helping reduce its trade receivable balance to Dh810 million, a five per cent improvement on 2014.
Over the course of the year, Dana Gas' capital expenditure was Dh858 million, a 92 per cent increase year on year. The company invested Dh550 million on the Zora Gas Field Development Project in the UAE and Dh308 million on the GPEA capital investment programme in Egypt, said the statement.