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Dana Gas Q2 profit rises to Dh33 million

DUBAI — Dana Gas PJSC, the UAE-based private sector natural gas company, posted on Wednesday a second quarter net profit of Dh33 million on the back of higher hydrocarbon prices and increased output.

Revenue from hydrocarbon sale rose to Dh428 million, with gross profit reaching Dh179 million representing increases of 41 per cent and 84 per cent respectively, compared to the same period last year, Dana Gas said in an emailed statement.

The company attributed the sales revenue surge to higher liquefied petroleum gas (LPG) and oil prices and to a strong production growth of 29 per cent from its operations in Egypt and Kurdistan. In Egypt, Dana Gas operates ten fields.

The Dh33 million net profit after tax for the second quarter was the same as in the first quarter when Dana Gas returned to profit as output and commodity prices rose.

In 2009 second quarter, Dana posted a net profit Dh392 million mainly because of its sale of a 10 per cent stake in Pearl Petroleum in Kurdistan. But on an “underlying” basis 2010 second quarter net profit after tax has increased by some Dh62 million on the same 2009 period.

The underlying basis strips out receipts from the sale of Pearl Petroleum stakes.

This year’s second quarter profit 
excludes an unrealised loss of Dh213 million, due to a decline in the value of the Company’s investment in a Hungarian oil and gas company, Dana Gas said.

“However, on a cumulative basis, the Company has recorded a total unrealised gain on this investment, from the date of acquisition to the end of June 2010, of Dh297 million.”

“We continue to target a 20 per cent increase in production for the full year compared to 2009 and, with the majority of our exploration drilling in the second half of the year,” said Dana Gas Chief Executive Officer Ahmed Al Arbeed.

“In the Kurdistan production continues to grow as we supply gas to meet the demands of the Erbil and Bazian power stations. We are producing gas and condensate through our new permanent facilities and the first train of the LPG plant at Khor Mor will commence LPG production shortly. Consequently, Dana Gas’ growth is set to continue,” said Al Arbeed.

“There was a loss because Hungary’s stock exchange was impacted by the Greek crisis and weakness of the euro and dollar,” said Chief Financial Officer Jim Dewar in an interview on Wednesday.

Dana’s Egypt operations produced 3.8 million barrels of oil equivalent (boe) during the quarter, a 19 per cent increase compared to the same period last year, the statement said.

“Our operations in Egypt and Kurdistan have delivered a good increase in production, while prices of gas remained strong,” Dewar said.

In the Kurdistan Region of Iraq, Dana Gas produced 1.06 million boe of gas and condensate during the quarter, an increase of about 88 per cent over the same period in 2009.

Dana expects the first train of LPG Plant at Khor Mor field to start later this year, said Dewar.

“This year we will focus on developing our existing assets Egypt, Kurdistan and the UAE,” he said.

Dewar said a final decision on selling 20-30 per cent of its Egypt assets 
will be made by the firm’s board 
members by the end of the third quarter this year or middle of the fourth quarter.

Two days ago, the Sharjah-based company said a natural-gas contract between its largest shareholder Crescent Petroleum Co. and National Iranian Oil Co. remained binding.

“In relation to the 25-year contract between our partner Crescent Petroleum and NIOC, we have been notified by Crescent Petroleum that the contract remains valid and internationally binding on the parties,” Dana Gas said. “It is currently in international arbitration and neither party has cancelled it,” Dana said, adding its rights remain unaffected.

—issacjohn@khaleejtimes.com