Key Highlights – 9M 2024
Sharjah, UAE; 8 November 2024: Dana Gas PJSC (the “Company”), the Middle East’s largest regional private sector natural gas company, announced today its financial results covering nine months to 30 September 2024.
The Company’s revenue for the first nine months of 2024 stood at AED 1,048 million ($286m), a 12% decline from AED 1,195 million ($326m) in 9M 2023, given lower realized prices in condensate and LPG segments. The Company generated a net profit of AED 410 million ($112 m) compared to AED 462 million ($126m) in 9M 2023, due to lower realized prices and production decline in Egypt. The Company continued focus on driving cost and production optimization, particularly in the KRI, minimizes the financial impact of these challenges.
The Company is also pleased to note the strength of its balance sheet through the successful reduction in debt by c. AED 285 million ($78m), bringing down the aggregate debt at the corporate level to c. AED 102 million ($28m).
KM250 Update
Dana Gas and Pearl Petroleum (Pearl) are fully committed to safely and efficiently resuming the KM250 project. Following the termination of the previous EPC contract, Pearl Petroleum has now assumed direct control of construction. Full-scale construction activities are set to restart imminently, with first gas scheduled in Q2 2026.
In October, Pearl successfully raised $350 million through a bond issue, which was well received by international investors. The bond, which carries a 3.5-year maturity, will allow sufficient time for the completion of KM250 and covers any remaining capital expenditure needs. Once operational, the KM250 expansion will significantly boost production capacity while delivering substantial benefits to the people of the Kurdistan Region and all of Iraq.
Egypt Consolidation
In early June, the Egyptian Parliament ratified the Company’s new Concession Agreement, which consolidates existing producing concessions into a unified framework with improved terms. Under this agreement, Dana Gas has committed to a significant development and exploration program, including drilling 11 wells. This work program, with a planned investment of approximately $100 million, is expected to increase production and add 80 billion cubic feet of gas reserves. These efforts will help offset natural declines in production and stabilize output over the coming years. Additionally, the increased gas supply is projected to yield cost savings of over $1 billion for Egypt’s economy, reducing reliance on imported LNG and mazut for power generation.
However, for these investments to move forward, Dana Gas has requested that the Egyptian government releases $24 million from the outstanding $59 million receivables balance, which will be fully reinvested in the country. Without this payment, the Company will not be able to proceed with the first phase of the consolidation program. These funds are essential to support the enhancements needed to boost the country’s gas production capacity. The Company is actively working with the Egyptian Natural Gas Holding Company (EGAS) to resolve this issue promptly, ensuring both parties can contribute in supporting Egypt’s energy objectives.
Richard Hall, CEO of Dana Gas, said:
“Our strong financial performance in 2024 demonstrates our operational excellence and resilience in a challenging environment of lower realized prices as well as a production decline in Egypt. Looking ahead, we are working diligently towards resuming full construction activities on our KM250 project, and our focus remains firmly on delivering the first commercial gas by Q2 2026.
With respect to Egypt, we are currently focused on resolving issues around payments, which are preventing us from investing as per the new Concession Agreement. Our plans are ready to execute as soon as the receivables are paid down. As one of the earliest UAE investors in Egypt, Dana Gas has contributed over $2 billion to the country’s energy sector since 2007. We look forward to continuing this contribution and playing a key role in advancing Egypt’s energy security.
We have also reduced our corporate debt over the course of the first nine months, which continues to strengthen our balance sheet. As a result, the Company will evaluate the resumption of a sustainable annual dividend in March.”
Operations & Production
The Group’s overall production in 9M 2024 averaged 55,300 boepd, reflecting an 8% decline from 59,750 boepd in 9M 2023. KRI production increased by 3% to 38,200 boepd, driven by higher gas volumes supplied to local power plants due to stronger demand. This growth builds on last year’s successful efforts, including the completion of debottlenecking activities that enhanced gas output.
In Egypt, production decreased by 24% to 17,100 boepd in 9M 2024 compared to 22,600 boepd in 9M 2023, mainly due to natural field declines. However, the newly ratified Concession Agreement is expected to support future investments and drilling activities, aimed at reversing this trend and maximizing the Company’s gas production capacity in the country.
Liquidity
As of 30 September 2024, the Company’s cash position stood at AED 553 million ($151m), with AED 433 million ($118m) held at the Pearl Petroleum joint venture.
Total collections during the first nine months amounted to AED 872 million ($238m), marking an increase from AED 612 million ($167m) in 9M 2023. This includes AED 748 million ($202m) from the KRI and AED 132 million ($36m) from Egypt.
The Company received an AED 349 million ($95m) dividend from Pearl Petroleum during the period.
Receivables in the KRI (Dana Gas share) stood at AED 253 million ($69m) and at AED 216 million ($59m) in Egypt by the end of Q3 2024.
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About Dana Gas
Dana Gas is the Middle East’s first and largest regional private sector natural gas Company established in December 2005 with a public listing on the Abu Dhabi Securities Exchange (ADX). It has exploration and production assets in Egypt, Kurdistan Region of Iraq (KRI) and UAE, with 2P reserves exceeding one billion boe and average production of approximately 60,000 boepd in 2023. With sizeable assets in KRI and Egypt, and further plans for expansion, Dana Gas is playing an important role in the rapidly growing natural gas sector of the Middle East, North Africa and South Asia (MENASA) region. Visit: www.danagas.com
Communication & Investor Relations Contact
Mohammed Mubaideen
Head of Investor Relations and Corporate Communications
IR@danagas.com
Key Highlights – H1 2024
Sharjah, UAE; 8 August 2024: Dana Gas PJSC (the “Company”), the Middle East’s largest regional private sector natural gas company, announced today its financial results for the half-year ended 30 June 2024.
Driven by improved gross profit margins in Q2 2024, the Company recorded a net profit increase of 3% to AED 124 million ($34m) versus AED 121 million ($33m) in Q2 2023. The improved margins helped offset the 7% drop in revenue during the same period due to lower realized prices.
Revenue in H1 2024 reached AED 696 million ($190m), compared to AED 814 million ($222m) in H1 2023 resulting in net profit of AED 263 million ($72m) given the lower realized prices in the Kurdistan Region of Iraq (KRI), alongside lower production outputs in Egypt.
KM250 Update
Following the drone attack on the Khor Mor facility on April 26, 2024, concerted efforts between Dana Gas and its partners are ongoing towards setting a swift completion date for the project. The Company will update the market in due course on the revised completion date and impact on costs.
Egypt Consolidation
In early March, the Egyptian Cabinet approved a draft law authorizing the Minister of Oil and the Egyptian Natural Gas Holding Co. (EGAS) to finalize a new Concession Agreement with Dana Gas. The agreement is a part of a strategic consolidation plan designed to enhance the life of assets in Egypt towards maximizing stakeholder value over the coming years. The revised terms should enable meaningful future investments alongside a resumption of drilling activities, positively impacting the Company’s production levels in Egypt and helping the Country meet its growing gas demand. The new agreement has been ratified by the Egyptian Parliament.
Richard Hall, CEO of Dana Gas, said:
“Thanks to a newly established payment mechanism with the local government, we have seen significant improvements in our receivables in the KRI, receiving regular payments since November 2023 and effectively reducing past receivables. Increased production output in the KRI, driven by higher demand from local power plants, has bolstered our operational performance. Coupled with robust hydrocarbon prices, we achieved a strong financial performance despite lower condensate prices and reduced output from Egypt.
We are dedicating all our efforts on behalf of the KRG and the people of Kurdistan to enable the earliest resumption by Pearl of KM250.
Looking ahead, reflecting our commitment to our Shareholders, we are optimistic about the remainder of 2024 and look forward to resuming dividend payments as soon as feasible.”
Operations & Production
The Group’s overall production in H1 2024 averaged 55,250 boepd, a 7% decrease compared to 59,800 boepd in H1 2023. KRI production grew 3% to 37,600 boepd, driven by higher gas volumes supplied to local power plants in response to increased demand. This continues the momentum from the previous year, when the Company achieved a record gas output of 520 MMscf/d.
Production in Egypt declined 25% to 17,650 boepd in H1 2024 from 23,400 in H1 2023, primarily due to natural field declines. However, the ongoing consolidation efforts are set to bring new production streams online, which are expected to significantly enhance the Company’s capacity and operational efficiency in the country.
Liquidity
The Company’s cash position as of 30 June stood at AED 513 million ($140m), including AED 403 million ($110m) held at the Pearl Petroleum joint venture.
The Group collected a total of AED 557 million ($152m) during the first half of the year, with contributions from KRI and Egypt at AED 480 million ($131m) and AED 77 million ($21m) respectively. The Company received an AED 154 million ($42m) dividend from Pearl Petroleum during this period.
The Company’s receivables in KRI were reduced to AED 297 million ($81m) and in Egypt at AED 220 million ($60m) at the end of the first half.
The Company’s balance sheet has grown stronger as a result of proactive measures that reduced corporate debt by AED 95 million ($26m) during the first half of 2024.
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About Dana Gas
Dana Gas is the Middle East’s first and largest regional private sector natural gas Company established in December 2005 with a public listing on the Abu Dhabi Securities Exchange (ADX). It has exploration and production assets in Egypt, Kurdistan Region of Iraq (KRI) and UAE, with 2P reserves exceeding one billion boe and average production of approximately 60,000 boepd in 2023. With sizeable assets in KRI and Egypt, and further plans for expansion, Dana Gas is playing an important role in the rapidly growing natural gas sector of the Middle East, North Africa and South Asia (MENASA) region. Visit: www.danagas.com
Communication & Investor Relations Contact
Mohammed Mubaideen
Head of Investor Relations
+971 6 519 4499
ir@danagas.com
Key Highlights – Q1 2024
Sharjah, UAE; 8 May 2024: Dana Gas PJSC (the “Company”), the Middle East’s largest regional private sector natural gas company, announced today its financial results for the quarter ended 31 March 2024.
For the first quarter of 2024, the Company generated revenue of AED 356 million ($97m) and net profit of AED 139 million ($38m), marking a reduction versus Q1 2023 earnings of AED 183 million ($50m). This was mainly due to lower realized hydrocarbon prices during the period compared to Q1 2023.
The Egyptian Cabinet, in early March, approved a draft law authorizing the Minister of Oil and Egyptian Natural Gas Holding Co. (EGAS) to enter into a new Concession Agreement with Dana Gas, as a key part of its consolidation plan. The Company expects parliamentary ratification of the law in the coming weeks.
On April 26, a condensate storage tank at Khor Mor was struck by a drone attack leading to an immediate suspension of production. Production was fully restored in a matter of days following concrete actions by the Government of Iraq and Kurdistan Regional Government (KRG), including firm commitments to significantly enhance security and strengthen defences at the Khor Mor site. This incident may potentially impact the completion schedule of the KM250 project. The Company continues to monitor the situation and will provide further updates to the market in due course.
Richard Hall, CEO of Dana Gas, said:
“It saddens me greatly to report the tragic fatalities and injuries following an incident at our Khor Mor field. We express our deepest condolences to the families. The gas plant was temporarily taken offline as we sought commitments for additional security measures from the Governmental authorities before fully restoring production.
Prior to the incident, we realized profits during the quarter despite lower condensate prices and reduced output from Egypt. In the KRI we posted strong production numbers as our plant continues to produce above the 500MMscf/d level it had reached at the end of last year. We have also made significant progress in improving our receivables in the KRI as a result of the new payment mechanism registered last year, which continues to operate seamlessly. This has allowed Pearl to resume dividend payments to the Company.
Operations & Production
Group production in Q1 2024 averaged 56,750 boepd, a 10% decrease compared to 62,900 boepd in Q1 2023, and a 2% increase on a quarter-on-quarter basis. KRI production was flat year-on-year at 38,600 boepd, continuing the momentum from the end of last year when it achieved record gas output of 520 MMscf/d. Production in Egypt declined 25% to 18,150 boepd in Q1 2024 from 24,200 in Q1 2023 due to natural field declines.
Liquidity
The Company’s cash position as of March 31 stood at AED 513 million ($140m), including AED 425 million ($116m) held at the Pearl Petroleum joint venture.
The Group collected a total of AED 279 million ($76m) during the first quarter, with the KRI and Egypt contributing AED 246 million ($67m) and AED 33 million ($9m) respectively.
The Company has been receiving dividend payments from Pearl in the first quarter following the implementation of the new payment mechanism with the KRG last year. This has ensured timely payments to Pearl and gradual settlement of past receivables.
The Company’s receivables in KRI stands at AED 334 million ($91m) and in Egypt at AED 209 million ($57m) at the end of the quarter.
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About Dana Gas
Dana Gas is the Middle East’s first and largest regional private sector natural gas Company established in December 2005 with a public listing on the Abu Dhabi Securities Exchange (ADX). It has exploration and production assets in Egypt, Kurdistan Region of Iraq (KRI) and UAE, with 2P reserves exceeding one billion boe and average production of approximately 60,000 boepd in 2023. With sizeable assets in KRI and Egypt, and further plans for expansion, Dana Gas is playing an important role in the rapidly growing natural gas sector of the Middle East, North Africa and South Asia (MENASA) region. Visit: www.danagas.com
Communication & Investor Relations Contact
Mohammed Mubaideen
Head of Investor Relations
+971 6 519 4499
ir@danagas.com
Sharjah, UAE; 18 April 2024: Shareholders of Dana Gas PJSC (the “Company’), the Middle East’s largest regional private sector natural gas company, at the Annual General Meeting held today have agreed to the Board of Directors’ recommendations for all the proposed resolutions. The meeting concluded with the election of a new 11-member Board of Directors for the coming three-year term. The new Board includes three new directors, namely; Mr. Mohammed Alhashimi, Mr. Omar al Mulla and Mr. Mohamed Al-Khoori.
Hamid Jafar, Chairman of the Dana Gas Board of Directors, said:
“I would like to take this opportunity to thank the retiring board members for their service and valuable contributions. And we are pleased to welcome the appointment of the new board of directors, whose expertise and capabilities will strategically guide the company for the coming term.
“Despite the decline in oil prices last year and a more challenging global economic environment, Dana Gas has once again proven the resilience and effectiveness of its business model. Our management of capital expenditure, reduction in operating costs, and increased production efforts have collectively enabled us to create long-term value for our shareholders.
“We have also made significant strides in improving our financial position. The establishment of a new payment framework in the Kurdistan Region of Iraq has already resulted in timely payments, and we are optimistic about resuming dividends to our shareholders at the earliest opportunity.
“Looking ahead, we remain focused on developing our assets in the Kurdistan Region of Iraq and Egypt, while committing to resilient and sustainable business practices for the benefit of our shareholders and the communities we serve.”
The Company’s future prospects are positive, and the Company is expected to continue its strong financial performance supported by strong operational performance and higher commodity prices. Pearl Petroleum continues to make steady progress on the KM250 expansion project in the Kurdistan Region and envisages completion of the project in the second half of this year. Once completed, the KM250 is expected to generate at least $150 million of additional revenue will boost the Company’s financial performance and liquidity.
Furthermore, as part of the Company’s continuous efforts to maximise its assets value, the Egyptian Cabinet, in early March, approved draft law authorizing EGAS to contract with Dana Gas. This significant development marks the next step in the process, as the draft law will be forwarded to the State Council for legal review before proceeding to Parliament for ratification. This agreement is set to extend the operational lifespan of the Company’s Egyptian assets, support its production levels, and includes further investment of approximately $100 million.
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About Dana Gas
Dana Gas is the Middle East’s first and largest regional private sector natural gas Company established in December 2005 with a public listing on the Abu Dhabi Securities Exchange (ADX). It has exploration and production assets in Egypt, Kurdistan Region of Iraq (KRI) and UAE, with 2P reserves exceeding one billion boe and average production of approximately 60 Kboepd in 2023. With sizeable assets in KRI and Egypt, and further plans for expansion, Dana Gas is playing an important role in the rapidly growing natural gas sector of the Middle East, North Africa and South Asia (MENASA) region. Visit: www.danagas.com
Highlights – FY 2023
Sharjah, UAE; 8 February 2024: Dana Gas PJSC (the “Company”), the Middle East’s largest regional private sector natural gas company, today announced its un-audited preliminary financial results for the full year ended 31 December 2023.
The Company reported a net profit of AED 586 million ($160mm) in 2023 as compared to AED 667 million ($182mm) in 2022. The decline in profits was primarily due to lower realized hydrocarbon prices partly offset by a production increase in the Kurdistan Region of Iraq (KRI) and reduced operating costs. Revenue decreased 20% to AED 1.55 billion ($423mm) in 2023 compared to AED 1.94 billion ($529mm) in 2022. Operational costs decreased by 7% to AED 195 million ($53mm) in 2023 compared to AED 210 million ($57mm) in 2022, due to prudent cost controls. The Company’s realized prices in 2023 averaged $51/bbl for condensate and $35/boe for LPG compared to $79/bbl and $42/boe respectively in 2022.
Net production in the KRI increased 8% to 36,900 boepd in 2023. The increase was a result of the successful completion of further plant de-bottlenecking enhancements at the Khor Mor facility, a strategic response to the growing demand for natural gas in the KRI. In November 2023, to help meet the growing power demand and further support local power generation, the Company achieved a record production output of 520 MMscf/d.
Pearl Petroleum continued to make steady progress on the KM250 expansion project in 2023, with the drilling of six KM250 project wells successfully completed, and it expects completion of the KM250 project in the second half of this year.
The Company anticipates the ratification by the Egyptian Parliament of the consolidated Concession Agreement in Q1 2024. This agreement is set to extend the operational lifespan of the Company’s Egyptian assets and support its production levels and includes further investment of approximately $100 million.
The Company has recently made notable progress in improving its collections including past receivables. In the KRI a new payment mechanism has been agreed with payments directly from the power stations to meet the obligations of the KRG as well as a schedule to collect past receivables. This has ensured the uninterrupted supply of gas to regional power plants and secured the investment needs to complete the KM250 expansion project.
Pearl Petroleum’s prioritization of its capital requirements given the rise in receivables in 2023 has resulted in Pearl’s shareholders, including Dana Gas, not receiving a dividend payment in 2023. Consequently, Dana Gas is not in a position presently to recommend a dividend to the upcoming shareholder’s meeting. However, recognizing the Company’s declared profitability in 2023, the Company does expect to make the associated dividend distributions in the future as sufficient cash is received. Dana Gas remains committed to its declared dividend policy, and to reinstating dividend payments as soon as the Company’s cash receipts permit.
Richard Hall, CEO of Dana Gas, commented:
“2023 was an operationally strong year for Dana Gas, but not without its challenges. In the KRI, we achieved record production in our gas output, an accomplishment that underscores our ability to optimize our resources. During the last quarter 2023, our financial position saw an improvement in our receivables in the KRI with a new mechanism agreed for direct payment from the power stations as well as a schedule to reduce past receivables, positioning us well for 2024, where enhancing our liquidity and reinstating dividends are key objectives for the company.
“Looking ahead to 2024, we will continue to work with our government partners in the KRI and Egypt to ensure timely payments of invoices and to achieve another year of successful operations. Our focus remains on developing our world class assets in the KRI and maximising the value of our Egypt assets, post ratification by the Egyptian Parliament.”
Operations & Production
Average group production declined slightly in 2023 to 58,700 boepd, a 2% reduction from 60,200 boepd in 2022. This was due to a 16% reduction in Egypt to 21,800 boepd, due to natural field declines. This was offset by an 8% increase in production output in the KRI to 36,900 boepd versus 34,300 boepd in 2022.
Liquidity
The Company’s cash balance at year-end stood at AED 480 million ($131mm), including AED 418 million ($114mm) held at the Pearl level. In 2023, due to the increase in receivables from the KRG and the investment needs to complete the KM250 project, Pearl Petroleum Company Limited (“Pearl Petroleum”) focused on preserving liquidity with no dividends paid to its shareholders including Dana Gas.
The Group’s total collections amounted to AED 872 million ($238mm) in 2023, of which the Company’s share of Pearl Petroleum’s collections in 2023 was AED 660 million ($180mm) and its collections in Egypt was AED 212 million ($58 mm).
As of 31 December 2023, the Company’s share of KRI receivables stood at AED 378 million ($103mm) and its Egypt receivables stood at AED 176 million ($48mm). Subsequent to the year end, Pearl Petroleum has collected a further AED 249 million ($68mm) in KRI.
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About Dana Gas
Dana Gas is the Middle East’s first and largest regional private sector natural gas Company established in December 2005 with a public listing on the Abu Dhabi Securities Exchange (ADX). It has exploration and production assets in Egypt, Kurdistan Region of Iraq (KRI) and UAE, with 2P reserves exceeding one billion boe and average production of approximately 60 Kboepd in 2023. With sizeable assets in KRI and Egypt, and further plans for expansion, Dana Gas is playing an important role in the rapidly growing natural gas sector of the Middle East, North Africa and South Asia (MENASA) region. Visit: www.danagas.com