Dana Gas Q3 profit slips on payment delays

UAE energy firm is owned $262m in Egypt and $450m for fuel supplied to Kurdistan in northern Iraq
Dana Gas Q3 profit slips on payment delays
(Photo for illustrative purposes only)
By Reuters
Mon 04 Nov 2013 11:54 AM

Dana Gas made a net profit of AED102m ($27.8m) in the third quarter compared with AED104m in the same period of last year, the United Arab Emirates energy company said on Monday.

Gross revenues for the third quarter were AED623m, up 21 percent from AED512m a year ago.

Delays in getting paid for operations in both Kurdistan and Egypt contributed to Dana having to restructure a $920m Islamic bond in April and helped spark a legal battle with the Kurdish region government (KRG).

Dana Gas said it had collected $8m in Egypt during the third quarter but that the trade receivables from the North African country still grew to $298m by the end of September, up from $262m at the end of the second quarter.

"We have been given strong indications by the Egypt government regarding planned payments in the next few months," Dana Gas' new chief executive Patrick Allman-Ward said.

"We welcome this positive step as it will allow our capital and exploration expenditure to remain in-line with anticipated spending plans, allowing us to pursue our strategy of maximizing our production from these resources."

Egypt has struggled to meet its soaring energy bills over the last two years and owes energy companies a total of around $6.2 billion.

In Kurdistan, Dana collected just $7 million in payments for fuel supplied to the autonomous region of northern Iraq during the third quarter, so that payments due grew by $48 million over the three months to $450 million at the end of the third quarter.

Dana, the largest oil and gas investor in Kurdistan, filed the first major legal case against the KRG over payments and production rights on October 21.

The Sharjah-based energy company saw its profit fall 45 percent in the second quarter of 2013, largely due to lower fuel sales prices and the mid-2012 shutdown of a liquefied petroleum gas (LPG) plant in Iraq after a fire.

Repairs to the Khor Mor LPG plant were completed in July.

Dana's average production volumes rose by 17 percent, year on year, to 66,850 barrels of oil equivalent per day (boepd) in the third quarter, driven by a 30 percent rise in production in Egypt.

However, net profit was reduced by higher royalty and depreciation charges.

Dana's share of production in the Kurdistan region of Iraq remained stable at 27,100 boepd.

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