Dana Gas Quarterly Profit Nearly Doubles as Production RisesBy
Company owed $1 billion from Egypt, Iraq’s Kurdish region
Output rose 16% to 69,900 barrels of oil equivalent a day
Dana Gas PJSC profit nearly doubled in the first quarter as the United Arab Emirates-based natural gas producer boosted output.
Net income rose to 40 million dirhams ($11 million) from 22 million dirhams a year earlier, the company said Thursday in a statement to the Abu Dhabi stock exchange. Sales climbed 44 percent to 432 million dirhams.
Dana Gas, which pumps most of its gas at fields in Egypt and Iraq, is seeking to recover payments from both countries for overdue bills. The company was owed $1 billion from Egypt and the self-governed Kurdish region in northern Iraq at the end of the quarter. The receivables rose from $982 million at the end of 2016 because payments from Egypt slowed, Chief Executive Officer Patrick Allman-Ward said on a media conference call.
Dana Gas shares rose 2.3 percent in Abu Dhabi, giving the company a market value of 3.1 billion dirhams. The stock has dropped 19 percent this year.
Hydrocarbon output increased 16 percent to 69,900 barrels of oil equivalent per day on increased production in Egypt, Allman-Ward said. Realized prices rose to $42 a barrel of oil equivalent a day from $30 a barrel in the first three months of 2016, the company said in a statement.
The company expects to keep oil and gas production at the same level for the rest of the year even with reduced spending, Chief Financial Officer Christopher Hearne said on a conference call with analysts.
‘Elephant’ in Room
New investment in Egypt will depend on the country’s ability to pay for current deliveries, Allman-Ward said. Dana Gas is “always looking at opportunities for bringing investors in” for all of its assets, he said. BP Plc joined Dana Gas at an exploration project in Egypt in 2015.
Cash on hand at the end of March declined to $289 million from $302 million at the end of 2016. The company in April repaid a $60 million loan related to a gas project in the emirate of Sharjah, where the company is based, Allman-Ward said.
“The elephant in the room’’ is the $700 million of debt Dana Gas has coming due in October, Allman-Ward said. Dana Gas asked bondholders this month to accept changed terms on the Islamic debt as it seeks to restructure borrowings for the second time in five years.
The company is still evaluating advisers for the restructuring and hasn’t yet appointed an external company for help with the debt plan, the CEO said said.
Dana Gas is seeking cash in an arbitration case against Iraq’s Kurdish authorities and expects to be awarded damages in September, Allman-Ward said. It will learn the size of the award at that time, he said.
The company is also seeking damages in a separate case that its main shareholder Crescent Petroleum Co. won against Iran’s National Iranian Oil Co. It expects to know the amount of the award in the NIOC case by the end of this year or early in 2018, Allman-Ward said.