Wednesday, May 15, 2013

(This story was originally published Tuesday.)

DUBAI (Zawya Dow Jones)--Uncollected dues for energy deliveries in Egypt continue to weigh on the U.A.E.'s Dana Gas (DANA.AD) despite long-standing discussions with the government about a settlement, the head of its Egyptian operations said on Tuesday, and the company is tailoring future investment there to its success in making collections.

Dana is now collecting fully for new energy deliveries, Patrick Allman-Ward said during a conference call, but it still had a backlog of 866 million U.A.E. dirhams ($236 million) in receivables at the end of the first quarter.

"We continue to engage in a dialog with the Egyptian government, the ministry and national oil companies to try and put into place a sustained receivables agreement for the remainder of the year, but we have not achieved that goal," Mr. Allman-Ward said.

Given a recent cabinet reshuffle that put into place a new petroleum minister, he said it was impossible to predict when such an agreement might be clinched.

Missed payments for energy products have been a crucial issue for Dana in recent years. The company has major gas exploration and production operations in Egypt, where political instability has reigned since its revolution two years ago. The state-owned Egyptian General Petroleum Corp. owes between $5 and $7 billion to foreign energy firms, an oil official told Zawya Dow Jones earlier this month.

Dana's future investment in Egypt would be tied to how much money it can collect, Mr. Allman-Ward said, giving the government an added incentive to settle up.

"We are tailoring our capital expenditures in keeping with the receivables position, and that is part of the ongoing dialogue we have with the government," he said. "The more we receive from the government, the more we are able to invest."

Dana reported a first-quarter net profit of AED241 million Tuesday, a 17% rise on the same period last year. Gross revenues fell 20% year-on-year, it said, but the bottom line was boosted by the sale of part of its stake in Hungary's MOL during the quarter. The company in February sold 1.675 million MOL shares, raising $135 million.

Dana shares last traded 1.8% higher at AED0.58.

Write to Asa Fitch at asa.fitch@dowjones.com

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15-05-13 0341GMT