By staff writer
Dana Gas is hedged against low oil prices, said Patrick Allman-Ward, CEO, Dana Gas
Sharjah-based Dana Gas said its exploration and production facilities, and operations in Kurdistan Region of Iraq (KRI) and Egypt, remain fully operational, and that its production has not been affected by the Covid-19 pandemic.
The Abu Dhabi-listed gas company, the Middle East’s largest private firm of its kind, said natural gas makes up 75% of its production, which is sold under long term gas sale contracts, with fixed prices to the host governments.
“These contracts make up for approx. 50% of our annual income and remain stable as they are unaffected by fluctuating oil prices,” the Dana Gas said in its statement.
“The balance sheet remains strong, with year-end 2019 cash balance of $425 million. In addition, the Company has no requirement to provide capex funding for its growth plans in the KRI.”
Patrick Allman-Ward, CEO, Dana Gas, said Dana Gas delivered a strong financial and operational performance in 2019, which has continued into 2020.
“The health and welfare of our staff is our first priority and we continue to take measures with regard to the COVID-19 pandemic to ensure their wellbeing whilst allowing our operations to continue without interruption,” he said.
“The current low oil price environment is putting stress on the entire industry sector but Dana Gas is naturally hedged against low oil prices due to our product mix and long term gas sales agreements at steady prices.
“We are also fortunate to operate in low cost environments and we have maintained a disciplined approach to cost control since the last price downturn in 2014.”
Allman-Ward said Dana Gas is currently reviewing expenditure and discretionary spending, and will take appropriate measures if the price of oil remains low.