SHARJAH - Sharjah-based Dana Gas' net profit jumped 483 percent to US$140 million (AED513 million) in first half of 2019 compared with US$24 million (AED88 million) in the same period last year.
This was mainly due to the recognition at the fair value of certain reserve-based earn-out entitlements amounting to $71 million, the company said in its financial results for the first half ended 30th June, 2019, which were released today.
"These are due from certain shareholders in Pearl Petroleum as considerations linked to the original share sale agreements, which were contingent upon proving up additional reserves in Pearl Petroleum which were confirmed by the recent independent reserves report by Gaffney Cline," it added.
Excluding the reserve based earn-outs of US$71 million, net profit from core operations increased by 187 percent to US$69 million (AED253 million) versus US$24 million (AED88 million) in H1 2018. This was principally due to an increase in Kurdistan Region of Iraq (KRI) production post debottlenecking which added US$20 million (AED73 million), Sukuk profit savings and reimbursement of arbitration costs, reflecting the company’s solid operational performance.
Revenue for the first six months of the year advanced three percent to US$242 million (AED887 million) as increased production in the KRI added US$27 million (AED99 million) to the topline which was partially offset by US$15 million (AED55 million) in reduced revenue due to price declines, and US$5 million (AED18 million) due to lower production in Egypt.
Dr. Patrick Allman-Ward, CEO of Dana Gas, said, "Dana Gas’ net profit of US$140million in the first half 2019 is a clear reflection of the company’s strong operational and financial performance with strongly rising production and revenues from the KRI. An independent certification exercise has shown a 10 percent increase in the company’s 2P reserves in the KRI to over 1 billion barrel of oil equivalent.
"This external reserve auditor‘s report confirms our view that the Khor Mor and Chemchemal Fields are world-class and are probably Iraq’s biggest gas fields." The company’s average production in H1 2019 was 68,200 Barrels of oil equivalent per day, boepd, a seven percent increase as compared with 63,600 boepd in H1 2018. Output in the KRI was up significantly to 32,400 boepd in H1 2019 compared to 26,100 boepd in H1 2018, while Egypt output was four percent lower at 34,100 boepd during the same time frame.
Dana Gas collections during H1 2019 were excellent. In the KRI, the Company billed US$81 million (AED297 million), and the full amount has been paid. The company also received a US$49 million (AED180 million) dividend from Pearl Petroleum in H1 2019 compared to US$44 million (AED161 million) in H1 2018.
"In Egypt, we billed US$58 million (AED213 million) and collected US$81 million (AED297 million) in payments, reducing our receivables to $117 million (AED429 million). This represents a 42 percent drop compared to the same period last year and at its lowest position since 2011," Dr. Ward said.
Company’s cash position is US$404 million (AED1.5 billion) as at 30th June, 2019, little changed from the US$407 million (AED1.5 billion) in FY 2018, and includes a dividend payment of US$105 million (AED384 million) made in May and ongoing Sukuk profit payments.
© Copyright Emirates News Agency (WAM) 2019.