Dana Gas swings to $83M profit

Dubai - Full-year 2017 gross revenue of $450M, up from $392M in 2016

Dana Gas on Sunday said it posted a net profit of $83 million in 2017 compared to an $88 million loss in 2016.
The company reported full-year 2017 gross revenue of $450 million, up from $392 million in 2016. The increase in revenue and profitability was due to the higher production in Egypt and the Kurdistan Region of Iraq and an increase in realised liquid prices, Dana Gas said in a statement.
"Net profit was also supplemented by the successful settlement agreement with KRG. However, in the fourth quarter, net profit was partly impacted by an impairment charge of $34 million against the UAE Zora asset following the year-end reserve report," said the statement.
Dana Gas said total average 2017 production was higher by one per cent at 67,600 barrels of oil equivalent per day (boepd), from 67,050 boepd in 2016. The average realised liquid price was $40 per boe, compared to $33 boe in 2016, a 21 per cent increase in 2017, it added.
The Sharjah-based gas producer, whose largest shareholder is Crescent Petroleum, said its year-end cash balance stood at $608 million, double the $302 million it reported at end of 2016. The cash balance was boosted by the $210 million dividend received from Pearl Petroleum Company as part of the settlement, a $110 million industry payment in Egypt and $22 million of condensate export in Egypt partly offset by capex, loan repayments and finance costs. The cash balance does not include $140 million which is held by Pearl for investment in further developing the assets in the Kurdistan, the statement said.
The company's share of collections in Kurdistan stood at $466 million. Following the cash payment element of the settlement and the reclassification of the residual receivables, the trade receivables balance stood at $7 million for the year-end and represents the amounts due against local sales for the month of December 2017. In Egypt, the Dana Gas collected $164 million, which was 129 per cent of billings.
Consequently, total receivable balance fell to $228 million from $265 million, a 14 per cent drop.
The KRG settlement saw Pearl (for which Dana Gas is a 35 per cent shareholder) settle a total of $2.239 billion debt due from KRG, including $ 1 billion received in cash upon settlement of which $400 million has been allocated for future investment to increase gas production at Khor Mor. The balance $1.239 billion was reclassified as petroleum cost recoverable by Pearl from future revenues.
The company said the KRG settlement cleared all past receivables and allows Pearl to start the development of two world-class gas fields with in-place volumes of approximately 75 trillion cubic feet of wet gas and seven billion bbls of oil, with plans underway to increase total production by 20 per cent this year and 170 per cent within two years.
Last week, Crescent Petroleum said it plans to raise natural gas output at its Pearl Petroleum venture by 80 million cubic feet per day by October, and by 500 million cfd within three years.
- issacjohn@khaleejtimes.com