Tuesday, Jan 17, 2012

--Company says will meet its debt obligations

--Has mandated advisors on sukuk due in October

--CEO says sukuk to be seen in context of successful company

By Nikhil Lohade

Of ZAWYA DOW JONES

DUBAI (Zawya Dow Jones)--Abu Dhabi-based Dana Gas (DANA.AD) said Tuesday it would continue to meet its debt obligations as it moved to squash market speculation about its ability to refinance a $1 billion convertible Islamic bond due in October this year.

Dana Gas shares were last trading flat at 0.34 U.A.E. dirhams ($0.093) on the Abu Dhabi bourse, after dropping more than 8% in the previous session. The stock has lost about 24% in January so far amid speculation about the oil and gas company's financial situation, including receivables from Egypt, where the company produces the bulk of its oil and gas output.

"Dana Gas over the last four years has timely and consistently paid on or before the due date the sukuk profit amount and will continue to do so pursuant with its obligations," the company said in a statement posted on the Abu Dhabi bourse website.

"With reference to its convertible sukuk which are not due until 31 October 2012, the company has been proactive in taking the initiative to mandate advisors including an international financial advisor and will update the market with its plans in good time and due course," it added.

Dana Gas Chief Executive Officer Ahmed Al Arbeed said in the statement that it was "important to view the sukuk in the wider context of a highly successful company that has already achieved very substantial asset values, together with significant revenue and production growth in its relatively short history."

The company said it was "progressing constructive discussions" with Egypt's government over delayed payments due from government-owned entities following last year's unrest in the country that led to the toppling of the former regime.

Dana Gas in 2011 collected a total of $177 million in cash attributable to its share of receivables from Egypt and Kurdistan, the company said.

The firm in November announced a third-quarter net profit of AED143 million, compared with AED33 million in the corresponding period a year ago, as it benefited from an increase in hydrocarbons production and higher prices for petroleum liquids.

It also said at the time that it was working with several international banks to seek advice on "financial strategy, capital structure, refinancing the company's $1 billion sukuk, and for developing further the group's plans to list its upstream business on the London Stock Exchange."

-By Nikhil Lohade, Dow Jones Newswires, +9714 446 1694, nikhil.lohade@dowjones.com

Copyright (c) 2012 Dow Jones & Co.

(END) Dow Jones Newswires

17-01-12 0726GMT