Dana Gas Q1 profit up 41%
Dana Gas said the increase in net profit was the result of improved revenues from higher production in the Kurdistan Region of Iraq (KRI), and a reduction in finance cost due to lower borrowings
Dana Gas on Sunday reported a 41 per cent surge in net profit to Dh88 million for the first quarter as compared to Dh62 million in Q1 2020.
In a statement, Dana Gas said the increase in net profit was the result of improved revenues from higher production in the Kurdistan Region of Iraq (KRI), and a reduction in finance cost due to lower borrowings in Q1 2021 as compared to Q1 2020, the company.
Revenue in the first quarter was Dh389 million, two per cent t higher compared to Dh382 million in Q1 2020. The improved performance was mainly due to a 9 percent production increase in the KRI, the Sharjah-based natural gas company said.
Realised price averaged $44/bbl for condensate and $33 per barrel of oil equivalent (boe) for LPG compared to $41/bbl and $30/boe respectively in Q1 2020, said the statement.
“Dana Gas has delivered a strong quarter with robust operational performance, continuing the positive momentum from the previous period. In the KRI we are moving ahead with our expansion plans to significantly boost production from 440 Million standard cubic feet per day (MMscf/d) to 690 MMscf/d by April 2023. This will contribute positively to our top and bottom line,” said Dr. Patrick Allman-Ward, CEO of Dana Gas.
In April, Dan Gas and Crescent Petroleum resumed the expansion project at the Khor Mor field in the Kurdistan Region of Iraq, which was halted due to the Covid-19 crisis, following an additional investment of $600 million. The firms aim to increase production from 440 MMscfd to 690 MMscfd, which is equivalent to an increase of 57 per cent.
Both UAE-based firms, Dana Gas and Crescent Petroleum operate the Khor Mor field on behalf of the Pearl Petroleum consortium.
After an agreement to lift the force majeure with both the Kurdistan Regional Government (KRG) and the contractor, the KM250 project is now on track for a revised start date of April 2023.
“With our partners in Pearl Petroleum, we are proud to be investing further in the gas sector of the Kurdistan Region of Iraq, delivering a reliable source of cleaner energy, and supporting local economic development," said Allman-Ward.
“The continuing receipt of payments in a timely manner gives confidence for our continued investment commitment as we enter the next exciting phase of growth with the Khor Mor expansion, which will be carried out under strict health protocols to ensure the safety of our staff and service providers.”
“We remain fully committed to managing our producing assets in Egypt for the benefit of all our stakeholders and focusing on evaluating the exciting potential of our offshore Block 6 Concession Area as quickly as possible,” said Allman-Ward.
Allman-Ward said said the company maintained its strong financial position, with increased production from the KRI and lower financing costs following the repayment of the company’s outstanding Sukuk in Q4 2020. "I am pleased that we maintained the dividend to Shareholders, for the fourth consecutive year, despite adverse economic conditions.”
Group production in Q1 2021 averaged 64,900 Barrels of oil equivalent per day (boepd), a 2.0 per cent increase as compared to 63,650 boepd in Q1 2020. The first quarter production increase was driven by the KRI, which grew by 9percent to 35,300 boepd from 32,400 boepd, building on the significant production increase in Q4 2020 after the Khor Mor plant by-pass project was completed in July 2020.
Production in Egypt declined by 5 percent to 29,050 boepd, which was more than offset by the increase in production in KRI.
In the KRI, Pearl Petroleum - the company consortium operated by Dana Gas and Crescent Petroleum - fully resumed the expansion project at the Khor Mor field. The first gas train will add 250 million cubic feet per day of much-needed additional gas production to supply the local power stations.
The project construction work had been put on hold due to the Covid pandemic but is now on track for a new target start date of April 2023, after an agreement to lift the force majeure. The KM250 expansion project involves a further investment by Pearl of $600 million to boost output by almost 60 percent.
Last month, Dana Gas announced its decision to retain and operate its onshore assets in Egypt alongside. The Company is currently evaluating its Block 6 Concession Area for drilling an exploration well as soon as possible.
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