Sharjah-based Dana Gas, one of the largest private natural gas companies in the Middle East, more than doubled its first-quarter net income as revenue increased on higher oil prices.
Net profit for the three-month period to the end of March surged 125 per cent to Dh198 million ($54m), the company said in a statement to the Abu Dhabi Securities Exchange, where its shares are traded.
Revenue for the reporting period jumped 32 per cent to Dh513m, boosted by a sharp rise in hydrocarbon prices and lower costs.
“Building on the positive momentum from 2021, Dana Gas has delivered one of its best quarterly results, supported by high energy prices, continued high KRI [Kurdistan Region of Iraq] operational performance and our low cost base,” chief executive Patrick Allman-Ward said.
“The outlook for the remainder of 2022 is particularly encouraging, as energy prices and demand remain strong due to the prevalent global economic challenges.”
Dana Gas said its earnings before interest, taxes, depreciation and amortisation climbed 62 per cent in the first quarter of 2022 to Dh297m.
The company's realised prices during the reporting period averaged $82 a barrel for condensate and $43 per barrel of oil equivalent for LPG, compared with $44 a barrel and $33 a barrel of oil equivalent, respectively in the first three months of 2021.
The group’s overall production fell slightly to 62,400 barrels of oil equivalent a day (boepd) in the first quarter, down from 64,900 boepd level a year earlier.
However, output in the KRI remained unchanged on an annual basis, averaging 35,400 boepd in the first quarter of this year. Production in Egypt declined by 7 per cent to 27,000 boepd, which the company attributed to natural field depletion.
The company said its KM250 gas expansion project in the KRI is progressing well and on track for completion next year.
“Looking ahead, good progress continues to be made on the $600m KM250 gas expansion project,” Mr Allman-Ward said.
“The next phase of development is expected to contribute an additional 25 per cent to our total production capacity by [the] second quarter of 2023, and will positively impact our top and bottom lines and support future dividend payments.”
Dana group’s cash and bank balance at the end of the reporting period increased 13 per cent to Dh766m, including Dh260m held at the Pearl Petroleum level.
The company collected a total of Dh253m during the quarter, compared with Dh213m in the first three months of 2021, with Egypt and the KRI contributing Dh62m and Dh191m, respectively.
KRI receivables stood at Dh216m at the end of March, compared with Dh176m for the same period last year.
In Egypt, receivables were Dh114m at the end of the quarter, compared with Dh480m in first three months of the 2021.
Shareholders of the company, which swung to a record annual profit last year as collections improved amid higher oil prices, approved a cash dividend of 4.5 fils per share for the second half of 2021, bringing the total dividend for the year to 8 fils per share.
The company said on Wednesday that it has started the process of hiring a new chief executive to replace Mr Patrick-Allman, who has led the company for about a decade.
The succession process is expected to take place over the course of the year. Mr Allman-Ward will continue to support the company as a senior adviser.