Dana Gas profits flow as Egypt and Iraq disputes are cleared

The Sharjah energy firm reported a 20 per cent jump in profits last year as payments came in from key production areas in Egypt and the Kurdish region of Iraq.

Dana Gas, the Sharjah-based fuel producer, reported a 20 per cent jump in profits last year as payments began flowing from key production areas in Egypt and the Kurdish region of Iraq.

The company earned US$165 million (Dh606m) in profits last year, up from $138m the year before, while its cash balance grew by 47 per cent to $165m from $112m.

The Egyptian uprising and a dispute between the Kurdistan regional government and the Iraqi federal government had delayed payments for fuel in Dana's key production areas.

But a deal between Erbil and Baghdad and continuing talks with the Egyptian leaders over backdated payments allowed the company to collect $301m last year from both governments.

"Despite regional challenges over the past year, Dana Gas has achieved strong profit growth," said Adel Al Sabeeh, the chairman.

"This, combined with the proposed sukuk refinancing result and the international and regional high growth levels forecast for the natural gas industry, gives us considerable optimism for the company's future." The increase in profits came the same year that Dana reached an agreement with creditors to change the terms of a $1 billion sukuk that matured in October.

The company hopes to get full stakeholder and regulatory approval to complete a deal this autumn to extend the maturity date by another five years and convert some bonds to shares. Hopes have also been revived for a listing in an active equities market such as London.

"The sukuk deal terms were a positive outcome for all sides," said Majid Jafar, the chief executive of Crescent Petroleum, the largest shareholder in Dana. "Now the focus is on collecting receivables and unlocking the true asset value through the planned international listing."

In 2011, the company said it was evaluating the possibility of a secondary listing in London.

Yesterday shares of Dana Gas on the Abu Dhabi bourse closed at 49 fils, unchanged since last week's close. The company plans to develop three new Egyptian gas discoveries, as well as the Zora gasfield off the coasts of Sharjah and Ajman.

Overall production averaged 60,000 barrels per day of oil equivalent last year.

Production declined in Egypt, where Dana drew down production as it waited for backdated payments.