Dana Gas PJSC announced its full year preliminary results for the year ended 31 December 2013. The Group’s full year production was up 8%, driven by a 14% jump in Egyptian output to 13.4 million barrels of oil equivalent from 11.8 mmboe in 2012. This resulted in a marginal increase in full year gross revenues to AED 2.39 billion [US$ 652 million] from AED 2.32 billion [US$ 633 million] in 2012. Q4 revenues rose sharply to AED 682 million [US$ 186 million] versus Q4 2012 when it was AED 554 million [US$ 151 million].
Although Q4 2013 net profit rose by 12% to AED 128 million [US$ 35 million] from AED 114 million [US$ 31 million] in Q4 2012 the Company’s net profit for the year was down 5% to AED 571 million [US$ 156 million] from AED 605 million [US$ 165 million] in 2012. This was due to an increase in royalty payments to the Egyptian government, a higher depreciation, depletion and amortization expense in Egypt as well as lower sales of high-margin LPG in the Kurdistan Region of Iraq. The lower sales of LPG were due to the repair of the LPG loading facilities at the Khor Mor facility in the first half of the year and to under lifting by the Ministry of Natural Resource of Kurdistan Region Government of Iraq since the facility came back on stream in July 2013.
Dana Gas’s full year cash balance improved by 24% to AED 748 million [US$ 204 million] from AED 601 million [US$ 164 million], thereby strengthening the balance sheet. Total assets at the end of 2013 increased to AED 12.9 billion [US$ 3.52 billion].
Commenting on the results, DAdel Al-Sabeeh, Chairman of the Board, said: “2013 was a year of significant achievements and steady progress for Dana Gas, despite the on-going challenges in the region. Natural gas is now the fastest growing energy source worldwide, and with half of the global reserves in our region, Dana Gas will Inshallah continue to play a growing role in this vital sector as we look to the future. As a Company, we have achieved positive results and also strengthened our management team. In addition the Board of Directors is actively engaged on all matters and focused on delivering maximum value to our esteemed investors.”
Patrick Allman-Ward, Chief Executive Officer, added: “Dana Gas achieved a good performance last year, despite the challenges, and the share price performance is a reflection of the confidence shown in the company and its future by both regional and international investors. In Egypt, we significantly increased production and the payment of outstanding receivables by the Government has continued. In the Kurdistan Region of Iraq, we continue to maintain operations and deliver on our commitments. We have also taken action to resolve our issues with the KRG and confirm our contractual rights, which we believe is in the best interests of our investors. In the UAE, we awarded the contract for the Zora Gas Field offshore platform and I am also excited about the prospects of exploring new fields and concessions across the Middle East region.”
Production and Development
Average net production in 2013 increased by 8% to 64,700 barrels of oil equivalent per day from the operations in Egypt and Kurdistan Region of Iraq compared to 2012’s average production of 59,800 boepd.
Dana Gas Egypt’s gas, LPG, condensate and crude oil full year output averaged 36,700 boepd, 14% higher as compared to 32,200 boepd in 2012. During the year, the company announced it achieved record gas production levels equivalent to 41,500 boepd, the highest level in recent years. The company successfully drilled and tested three development wells during the year and announced its 25th discovery with the Begonia-1 well in the Nile Delta. Q4 2013 output averaged 39,800 boepd (Q4 2012: 32,700 boepd).
In the Kurdistan Region of Iraq, the company saw its full year share of production in the Khor Mor Field remain constant at 27,600 boepd. Repairs to the LPG loading were also completed and lifting of the product has been steadily growing but remains below full capacity.
In the UAE, Dana Gas awarded Adyard Abu Dhabi the AED 62.5 million [US$ 17 million] contract for the fabrication of an offshore platform for the Zora Field Development Project, which spans the territorial waters of Sharjah and Ajman. The project is in line for first gas in early 2015 with an initial capacity of 40 mmscfd.
Dana Gas is also continuously looking at new concessions and in 2013, successfully bid and won a 100% working interest in the North El Arish Offshore (Block 6) Concession Area in Egypt. The area is located in the high potential offshore Nile Delta, in the eastern part of the Mediterranean Sea, in water depths of up to 1,000 meters and covering an area of 2,980 km². The company also pre-qualified as a non-operator in Lebanon’s first Offshore Licensing Round and will be able to bid when the licensing round is confirmed.