Dana Gas, one of the largest private natural gas companies in the Middle East, reported a first-quarter revenue of Dh447 million ($122 million) as lower oil prices affected earnings.
Net profit attributable to the owners of the company for the three-month period that ended in March stood at Dh183 million, compared with Dh198 million in the corresponding period last year, the Sharjah-based company said on Wednesday in a filing to the Abu Dhabi Securities Exchange, where its shares are traded.
The effect of lower hydrocarbon prices on the company’s profitability was partially offset by a production increase in Iraq's Kurdistan region and reduced operating costs of 14 per cent, it said.
“Dana Gas has delivered a strong set of financial and operating results despite the downturn in energy prices. We remain financially disciplined and focused on maintaining production and lowering costs, despite the challenging economic situation in the KRI and Egypt,” chief executive Patrick Allman-Ward said.
“Looking ahead, we are focusing our efforts on managing capital expenditure and preserving liquidity, as we continue to focus on recovering our outstanding receivable payments with both the KRG and Egyptian government.”
Last week, oil futures posted a third straight week of losses amid concerns of a recession in the US and signs of weak crude demand in China, the world’s largest energy importer.
Traders are awaiting April’s US consumer price inflation numbers, a key metric, to better understand the Federal Reserve's future monetary policy. The report will be released on Wednesday.
Brent, the benchmark for two thirds of the world’s oil, is currently trading at about $76 a barrel after touching nearly $140 a barrel in 2022, following Russia's invasion of Ukraine.
Dana Gas's realised hydrocarbon prices during the first quarter averaged $59 a barrel for condensate and $39 per barrel of oil equivalent for liquefied petroleum gas, compared with $82 a barrel and $43 per barrel of oil equivalent, respectively in the first three months of 2022.
Production volumes for the first quarter averaged 62,900 barrels of oil equivalent per day (boepd), a 1 per cent annual increase.
While production in Iraq's Kurdistan region increased by 9 per cent to 38,700 boepd, output in Egypt declined by 10 per cent to 24,200 boepd due to natural field declines.
Dana Gas has operated in Egypt through its subsidiary Dana Gas Egypt since 2007 and is focused on producing natural gas and gas liquids, including condensate and liquefied petroleum gas.
“Our target date for completion of the KM250 gas expansion project is April 2024 and we are hopeful our Egypt consolidation agreement will be finalised soon,” Mr Allman-Ward said.
The Dana group’s cash and bank balance at the end of the reporting period stood at Dh542 million, including Dh374 million held at the Pearl Petroleum joint venture.
The company collected Dh231 million during the quarter, with Egypt and Iraq's Kurdistan region contributing Dh55 million and Dh176 million, respectively.
Receivables in Iraq's Kurdistan region and Egypt stood at Dh293 million and Dh128 million, respectively, at the end of the first quarter.
In April, shareholders of the company approved a dividend of 4.5 fils per share for the second half of 2022, bringing the total dividend for the year to 9 fils per share or Dh630 million, a 12.5 per cent annual increase.
Dana Gas approved a proposal in January to raise the foreign ownership of its shares to 100 per cent.