BAGHDAD: Dana Gas, the Middle East’s largest regional independent natural gas company, today reported a third quarter net profit of $13 million, compared to a net loss of $9 million in the corresponding period in 2015. The nine-month net profit stood at $26 million, against a gain of $10 million in the same period last year. Profits rose due to a combination of accrued interest due on overdue receivables from the KRG and additional reductions in operating expenditure and G&A, the company said.
The company reported nine months and third quarter revenues of $280 million and $102 million, respectively, compared to revenues of $324 million and $93 million in the same period 2015. Lower oil prices over the first nine months of 2016 led to a decline in revenues. Combined average realised liquids price during the third quarter was $32 per barrel of oil equivalent (boe) as compared to $41 per boe in the third quarter 2015. However, the third quarter’s incremental production in Egypt and new production from Zora Gas Field pushed revenue higher on a quarter-on-quarter comparable basis, it said.
Dr Patrick Allman-Ward, CEO, Dana Gas, said: “During the quarter we continued to make progress on our group production output goals, reaching 69,400 boepd. This highlights the success of our focus on organic growth and disciplined capital expenditure during the last 18 months. Despite our collections decreasing due to disappointing payment delays from Egypt, we have managed to offset these through better than anticipated collections in Iraq’s Kurdistan Region. Nevertheless, we remain mindful of our long-term cash requirements, and we will have to review our operational and capital expenditure in Egypt for 2017 if the situation does not improve.”
Total collections for the third quarter and nine months period were $48 million and $147 million, respectively. Egypt’s collections for the nine months were $69 million, representing 77 per cent of total revenues over the period. Egypt’s receivable balance end Q3 increased to $242 million (Q2 2016: $230 million).
In Kurdistan Region of Iraq (KRI) collections stood at $64 million, representing 121 per cent of the total revenues for the period. The company’s share of the KRI’s receivables balance was down to $722 million as of September 30 (Q2 2016: $726 million). Group production for Q3 2016 was 69,400 barrels of oil equivalent per day (boepd), a 14 per cent increase from 60,800 boepd in Q3 2015. The main contributing factor was Egypt, which increased its production by 24 per cent on a year-on-year basis to 40,000 boepd (reaching maximum plant capacity). The high potential Block 3 Mocha-1 well in Egypt operated by BP is due to reach its final target depth early 2017.
In the KRI production remains steady at 26,100 boepd (Q3 2015: 28,000 boepd), it said. In the UAE, production in the Zora Gas Field has continued to decline in the third quarter with production of 2,560 boepd as compared to 3,250 boepd in Q2 2016. The well workover planned to take place in October has been deferred as the company undertakes further analysis to determine what additional work may be required to improve the flow rates, it said.
