Sharjah
Dec 30 2012
Dana Gas PJSC, the Middle East’s first and largest regional private sector natural gas company, has announced that it has made two new onshore gas discoveries in the Nile Delta Basin of Egypt. Initial estimates indicate that together the two discoveries, known as Alyam-1 and Balsam-1, should increase the company’s commercial reserves by between 17 (proved) and 95 (proved & probable) million barrels of oil equivalent (MMBOE).
Mr. Rashid Al Jarwan, Executive Director and Acting CEO of Dana Gas said “Our latest two discoveries confirm the Nile Delta as a prolific hydrocarbon-bearing basin. Dana Gas remains fully-committed to the long term development of Egypt’s gas industry and its essential role in fuelling the nation’s economic growth.”
The Balsam-1 well encountered 51 meters of net pay in a good-quality sandstone reservoir of the Qawasim formation at high pressure, indicating high deliverability from the field. Production testing yielded 10 million standard cubic feet per day of gas on a 20/64-inch choke and more than 1,000 barrels per day of liquid condensate. The two new fields have the highest liquid yield of any gas field discovered in the area so far.
The Balsam-1 and Alyam-1 discoveries in West El Manzala are adjacent to the El Basant Field and its associated pipeline network, operated by Dana Gas. They follow two other discoveries in 2012 by Dana Gas:
In October 2012 The Company announced the commencement of Dana Gas’ joint-venture, the Egyptian Bahrain Gas Derivatives Company (EBGDCo) NGL extraction plant at Ras Shukheir in Egypt. EBGDCo’s average gas intake rate has reached 75 MMscfd and four cargo shipments of propane have been exported. When fully operational, the plant will extract 120,000 tonnes per annum of propane & butane from a gas stream of 150 MMscfd.
Notes to Editors:
Sharjah
Dec 10 2012
Q1 What has actually been agreed so far?
The Company and the Ad Hoc Committee of Sukukholders have reached an agreement on the key commercial terms of a refinancing of the Existing Sukuk and the process by which the transaction will be implemented.
Furthermore, the Ad Hoc Committee, representing the majority of the principal amount of Existing Sukuk, has signed a Lock up and Standstill Agreement to, subject to the terms of the Agreement, support and vote in favour of the deal.
Q2 Why haven’t shareholders been consulted or involved in the process so far?
In reaching a deal, the Company and its Board of Directors have taken into account the interests of all stakeholders, including first and foremost its shareholders. It should be noted that discussions between the Company and the Ad Hoc Committee involved material non-public information that could not be released prior to this time. This material has now been made available on the company website.
The consultation process with the regulators has now commenced and shareholders will also be provided with adequate disclosure and will have the right to vote to approve the transaction in an Extraordinary General Meeting (EGM), expected to be held in Q1 2013, once the lengthy legal documentation process has been completed, which is normal in such transactions.
Q3 Does this Transaction give more benefits to sukukholders or shareholders?
The Company believes the agreed terms achieve a balanced solution to the benefit of all stakeholders and are in the long term interests of the Company.
Shareholders will continue to own 100% of the equity upon closing and will not be required to make any additional equity contribution as part of the Transaction. Shareholders also benefit from the 5-year tenor on the New Sukuks, with a reduced debt service burden, no material change in potential dilution (assuming conversion of the Convertible Sukuk), and a stable, long-term capital structure that will allow the Company to take full advantage of strong long-term business fundamentals.
Sukukholders benefit from two separate instruments thereby allowing both credit and equity upside participation (thereby providing proportional participation in any future value creation, alongside shareholders, through the new Convertible Sukuk), an enhanced security package and a blended profit rate increase of 0.5%.
Q4 How will the Transaction impact shareholders in terms of the value of their equity holdings?
Post Transaction, shareholders continue to own 100% of the Company’s equity upon closing – there is no debt to equity swap.
The terms of the Transaction are specifically designed to create a long-term, stable capital structure.
Q5 If Convertible Sukuk holders convert their holdings into shares, will shareholders be diluted?
Assuming conversion of the new Convertible Sukuk at a future point in time, the relative ownership of existing shareholders and the new Convertible Sukuk holders would be substantially similar to that in the Existing Sukuk.
The conversion price in respect of the US$425 million Convertible Sukuk is set at a 50% premium to the 75 calendar day volume-weighted average price, measured over a period commencing on 1 December 2012, with a floor of AED 0.75 and cap of AED 1.00. This is to ensure that potential dilution remains substantially similar to that under the Existing Sukuk.
The potential dilution under the terms of the Existing Sukuk (assuming full conversion) is approx. 21%, and potential dilution under the Convertible Sukuk (again, assuming full conversion) would range between 19% and 24%, depending on where the future conversion price is finally set.
Q6 Under the new documentation, what is the additional security of US$300 million made up of?
The security package is restricted to Egypt and certain UAE assets. The additional security of approximately US$300 million in value includes security over receivables of the Egyptian assets of approximately US$200 million and certain other assets in the UAE.
Q7 By how much will the Company’s debt obligations increase or decrease as a result of this Transaction?
There will be immediate decrease of US$150 million via (i) US$70 million cash pay-down of the Existing Sukuk at closing, and (ii) US$80 million principal amount of the Existing Sukuk already owned by the Company will be cancelled. The Company has the option to increase the cash pay-down element any time prior to five days before the expiration of the consent solicitation period.
Q8 Can the Company comfortably afford to fund ongoing operations and pursue growth opportunities as well as service its debt obligations?
The Transaction has been structured with the objective of enabling the Company to maintain sufficient liquidity and continue executing on its business plan without disruption. Due to the only slightly higher average coupon rate (8% vs. 7.5% previously) and the reduced debt amount, the debt servicing requirement on the Company will actually be lower. In addition, Dana Gas will have the ability to pay down the New Sukuks (subject to the applicable call premia on the Ordinary Sukuk and the soft call provisions on the Convertible Sukuk), or make purchases in the market.
Q9 What levels of acceptance are needed from sukukholders and shareholders?
The Transaction is currently intended to be implemented by way of amendment to the Existing Sukuk documentation. Such an amendment requires a quorum to conduct the sukukholder meeting with representation from more than half of the outstanding principal amount of the Existing Sukuk and of those present at least 75% voting in favour to pass the Extraordinary Resolution. A subsequent meeting would be required if sufficient sukukholders are not present at the first meeting. Any amendments duly approved will be binding on all sukukholders, whether present at the meeting or not. The Lock-up and Standstill Agreement signed by the Ad-Hoc Committee obliges them, subject to the terms of such an agreement, to vote in favour of the Transaction, meaning a majority of the holders of the Existing Sukuk already support the Transaction.
Implementation of the Transaction also requires shareholder approval, based on a simple majority vote at an extraordinary general meeting (“EGM”), expected to be held in Q1 2013. The initial meeting requires shareholders holding 75% of the shares to be present. Subsequent meetings would be required if sufficient shareholders are not present at the first, and such later meetings will have lower quorum requirements as per the Company’s Articles of Association.
Q10 Do you need additional support from Sukukholders outside the Ad Hoc Committee to complete this Transaction?
The Ad Hoc Committee represents more than 50% of the principal amount outstanding of the Existing Sukuk, which is sufficient for a quorum to conduct a sukukholder meeting. The Company remains committed to obtaining the support of all stakeholders, including additional sukukholders.
Q11 What do shareholders have to do next?
The Company intends to schedule an EGM in the first quarter of 2013, after completing the lengthy legal documentation process as is normal in such transactions, to request shareholder approval of the terms of the Transaction that require such approval post securing approval of the concerned regulatory authorities. The request to the shareholders for an EGM will be accompanied by detailed information on the Transaction to enable shareholders to make an informed decision.
Q12 Why should shareholders vote in favour of the Transaction?
The Transaction is specifically designed to create a long-term, stable capital structure that would allow the Company to create value to all stakeholders, including shareholders, from strong long-term business fundamentals, and its valuable assets.
The Transaction is also designed to enable time for normalisation of economic and political realities and consequent challenges that the Company has been facing in Egypt and Kurdistan, namely the delays in payment of receivables.
Key benefits of the transaction to shareholders are:
100% ownership upon closing and no requirement for shareholder cash support or debt to equity swap.
If conversion of the Convertible Sukuk takes place, the relative ownership would be substantially similar to that in the Existing Sukuk.
A long term 5-year transaction, which will allow the Company to create value for shareholders.
A reduced debt service burden on the Company, with the ability to further reduce debt as the liquidity position improves.
Q13 Do Sukukholders have a say in the appointment of new management in the Company?
The new management will still only be approved by, and remain under the direction of, the Company’s Board of Directors.
Q14 Is the Company permitted to pay the New Sukuks off early if the liquidity situation improves, or will it face penalties for doing so?
Under the agreed terms, there is no restriction on repaying the New Sukuks: The Ordinary Sukuk could be redeemed prior to maturity in each of the five years of its term at premium to par, as is normal in such transactions, that ranges from 9% to 0%. The Convertible Sukuk could also be redeemed prior to maturity on substantially similar terms to those in the Existing Sukuk documentation.
The Company is also allowed to make unrestricted open-market purchases, at any point of time, of both the Ordinary Sukuk and the Convertible Sukuk.
Cautionary Note Regarding Forward-Looking Statements and Other Disclaimers
This press release contains forward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms “believes,” “estimates,” “anticipates,” “expects,” “intends,” “may,” “will” or “should” or, in each case, their negative, or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this press release and include statements regarding our intentions, beliefs or current expectations concerning, among other things, our results of operations, financial condition, liquidity, prospects, growth, strategies and the industry in which we operate.
By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. We caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, our financial condition and liquidity, and the development of the industry in which we operate, may differ materially from those made in or suggested by the forward-looking statements contained in this press release. In addition, even if our results of operations, our financial condition and liquidity, and the development of the industry in which we operate, are consistent with the forward-looking statements contained in this press release those results or developments may not be indicative of results, conditions or developments in subsequent periods.
All forward-looking statements attributable to us are expressly qualified in their entirety by these cautionary statements. We undertake no obligation to publicly update or publicly revise any forward-looking statements, whether as a result of new information, future events or otherwise. All subsequent written and oral forward-looking statements attributable to us or to persons acting on our behalf are expressly qualified in their entirety by the cautionary statements referred to above and contained elsewhere in this press release.
Under no circumstances shall this announcement constitute an offer to sell, or the solicitation of an offer to buy, any securities nor shall there be any sale of the securities mentioned in this press release in any jurisdiction in which such offer, solicitation or sale would be unlawful. The potential transaction described in this announcement and the distribution of this announcement and other information in connection with the potential transaction in certain jurisdictions may be restricted by law and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Information regarding the potential transaction and the securities shall be contained in an offering document, if any, that may be produced by the issuer of the securities and potential investors should refer to such offering document when, and if, it becomes available. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. This communication is not, and may not be used in connection with, an offer of securities for sale or the solicitation of an offer to buy securities in the United States, Australia, Canada, Japan, Bahrain or Qatar or any other jurisdiction where such offers or solicitations are not permitted by law. The Issuer has not registered, and does not intend to register, such securities in any of these jurisdictions and does not intend to conduct a public offering of such securities in any of these jurisdictions. In particular, no such securities of the Issuer have been nor will be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and such securities may not be offered, sold or delivered within the United States or to, or for the account or benefit of, U.S. persons (as defined in Regulation S under the Securities Act) except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. This information is not to be shown or given to any person other than the recipient, and is not to be forwarded to any other person, copied or otherwise reproduced or distributed to any other person in any manner whatsoever. Failure to comply with this directive can result in a violation of the Securities Act.
Sharjah
Dec 10 2012
Click here:Gaffney Cline report
Click here:Presentation on “Deal announcement including Egypt business overview”
Significant reduction of outstanding debt to US$850 million with overall lower debt servicing requirements
Deal structured to ensure that potential dilution of shareholders remains substantially similar to current levels
Refinancing will place Dana Gas on a stronger financial footing in the interests of all stakeholders
Dana Gas PJSC, (‘Dana Gas’ or ‘the Company’), the Middle East’s first and largest private sector natural gas company, is pleased to announce the detailed terms, conditions and implementation information for the refinancing transaction (the “Transaction”) in relation to its US$1 billion 7.5% Sukuk-al-Mudarabah due 31 October 2012 (the “Existing Sukuk”).
Key Transaction Highlights:
Lock-up and Standstill Agreement signed by the Ad Hoc Committee of Sukukholders (‘The Ad Hoc Committee’), which represents the majority of the outstanding principal amount of the Existing Sukuk. Subject to the terms of the Agreement, the members of the Ad Hoc Committee have undertaken to vote in favour of the Transaction.
Reduction in the Company’s outstanding debt from US$1 billion to US$850 million via US$70m cash pay-down and cancellation of another US$80 million of the Existing Sukuk already owned by the Company.
Remaining US$850 million split into two tranches to ensure potential dilution for shareholders remains substantially similar to current levels: a US$425 million Ordinary Sukuk and US$425 million Convertible Sukuk (together the “New Sukuks”), each with 5-year maturity to ensure long-term financing.
The average combined profit rate on the two New Sukuks is 8%, representing a slight increase over the Existing Sukuk profit rate of 7.5%.
This average profit rate of 8%, together with the lower debt amount of US$850 million, constitutes a lower debt servicing obligation on the Company as compared to the debt servicing obligations under the Existing Sukuk.
The security package available to holders of the New Sukuks will be enhanced by US$300 million of value (inclusive of security over receivables of the Company’s Egyptian assets), but is restricted to the Company’s Egyptian assets and certain UAE assets.
The Conversion price of the Convertible Sukuk has been set at a 50% premium to the 75 calendar day volume-weighted average price, measured over a period commencing on 1 December 2012 (with a floor of AED 0.75 and cap of AED 1.00).
Dana Gas has the option to pay down the outstanding principal amount of the New Sukuks prior to the new maturity date of 31 October 2017, subject to the applicable call premia on the Ordinary Sukuk and the soft call provisions on the Convertible Sukuk.
Dr. Adel Khalid Al-Sabeeh, Chairman of the Board of Dana Gas said,
“We believe that the terms being announced today represent a comprehensive, long-term solution which balances the interests of all stakeholders. The Board plans to secure necessary stakeholder consents for implementation of the Transaction, while the Company continues to focus on achieving its growth potential over the coming years and continue to realise value.”
Rashid Al-Jarwan, Executive Director and Acting Chief Executive Officer of Dana Gas said:
“Dana Gas has a robust asset base and has successfully grown revenues, production, reserves and asset values consistently over the last 5 years, in line with our strategy. The Company’s liquidity constraints were caused by well-known external factors, and we believe that these revised terms of the New Sukuks place Dana Gas on a firm foundation for further growth and progress.”
Transaction details:
Subject to approval by sukukholders and shareholders, the Transaction will include:
Reduction in Company’s outstanding debt from US$1 billion to US$850 million:
The Company’s debt burden will immediately be reduced by US$150 million via (i) US$70 million cash pay-down of the Existing Sukuk at closing (which may, for a period prior to closing of the Transaction, be increased at the option of the Company), and (ii) the cancellation of US$80 million principal amount of the Existing Sukuk already owned by the Company.
The remaining principal amount of the Existing Sukuk of US$850 million will be split into two new sukuk instruments with a five year maturity consisting of an Ordinary Sukuk and a Convertible Sukuk of equal principal amounts of US$425 million each (reduced pro-rata if cash pay-down at closing is greater than US$70 million).
Each existing sukukholder will be allocated an equal amount of the two New Sukuks, pro rata to the aggregate principal amount of the Existing Sukuk held by each holder immediately before the closing of the Transaction.
Lower debt servicing obligations for Company with average profit rate of 8% on lower debt amount of US$850 million:
Existing Sukuk holders will receive an average profit payment of 8% combined across the New Sukuks.
The Ordinary Sukuk will have a 9% fixed profit rate (payable quarterly in cash) and will mature on 31 October 2017. The Convertible Sukuk will have a 7% fixed profit rate (payable quarterly in cash) and will mature on 31 October 2017.
Security package has been enhanced by US$300 million of value (inclusive of security over receivables of the Company’s Egyptian assets) but is restricted to Egypt and certain UAE assets:
Both instruments will rank pari passu with each other and will be secured on an equal and ratable basis and will benefit from an enhanced security package of approximately US$300 million of value in addition to the existing security on the Existing Sukuk. The security package is restricted to Egypt and certain UAE assets.
The covenant package for the New Sukuks will be substantially similar to that in the Existing Sukuk.
The Conversion price has been set to recognise long term support of shareholders and to ensure that potential dilution remains substantially similar to current levels
At closing of the Transaction, existing shareholders will continue to own 100% of the Company’s equity. Assuming later conversion of the new Convertible Sukuk, the relative ownership of existing shareholders and the holders of the new Convertible Sukuk would be in a range similar to that in the Existing Sukuk to ensure that potential dilution remains substantially similar to current levels. The potential dilution under the terms of the Existing Sukuk is circa 21%, and potential dilution under the new Convertible Sukuk would range between 19% and 24%, depending on where the conversion price is eventually set.
The Conversion Price for the new Convertible Sukuk will be set at a 50% premium to the 75 calendar day volume-weighted average price, measured over a period commencing on 1 December, 2012, with a floor of AED 0.75 and cap of AED 1.00.
In the event that the effective Conversion Price is less than AED1.00, the economic value difference between the effective conversion price and AED1.00 shall be paid in cash at conversion, or at the Company’s option, in additional shares of the Company.
Customary adjustments of a similar nature to the terms of the Existing Sukuk would be applicable to the conversion price to reflect any applicable corporate events in the future such as new share issues, dividend payments, etc.
Conversion rights may be exercised by the new Convertible Sukuk holders at any time after 31 October 2013.
Dana Gas has the option to pay down both New Sukuks before maturity:
Under the agreed terms, there is no prohibition on repaying the New Sukuks early. The Ordinary Sukuk could be redeemed prior to maturity in each of the five years of its term at premium to par that ranges from 9% to 0%. The Convertible Sukuk could also be redeemed prior to maturity at substantially similar terms to those in the Existing Sukuk documentation. The Company is also allowed to make unrestricted open-market purchases, at any point of time, of either or both the Ordinary Sukuk and the Convertible Sukuk.
Management appointments and investor relations:
There is no change in the Company’s Board of Directors. The Company will exert its best efforts to recruit the new CEO by end of the first quarter 2013, and the CFO and Investor Relations Director by the end of the second quarter 2013.
International Listing:
The Company will assess the possibility of an international listing of its upstream assets in due course. If it deems that this will enhance value for both shareholders and sukukholders, the Company will seek the necessary consents as part of the consent solicitation process and pursue this course of action.
Other key terms of the New Sukuks
Documentation of the New Sukuks shall be governed by English law, certain Shariah documents by UAE law, and the security documents by applicable local law, as with the Existing Sukuk.
The New Sukuks shall be listed on the London Stock Exchange or another international stock exchange, as with the Existing Sukuk.
Next Steps
In order to successfully complete the Transaction, the Company will seek the consent of the shareholders, existing sukukholders, and the relevant regulatory authorities. It is currently expected that the Transaction will be completed early in the second quarter of 2013.
The Company currently intends to schedule an extraordinary general meeting (“EGM”) in the first quarter of 2013 to request shareholder approval of the terms of the Transaction. The request to the shareholders for an EGM will be accompanied by a description of the terms of the Transaction that require such approval.
Similarly, the Company will seek consent from existing sukukholders for the proposed Transaction at a meeting of sukukholders in the first quarter of 2013. The request for sukukholders to approve an Extraordinary Resolution will also be accompanied by a description of the terms of the Transaction.
The Company will also, in accordance with its disclosure obligations under the ADX listing rules as well as the rules of the London Stock Exchange, keep all relevant parties informed of any material events.
If any of the terms of the Transaction as described above are amended in consultation with, and with the agreement of the Ad Hoc Committee, such amendments will be communicated to all relevant stakeholders in accordance with all applicable laws before the consent of such stakeholders is sought for the Transaction.
For the period from 31st October 2012 to closing, Existing Sukuk holders will receive a profit payment of 8% based on aggregate principal amount of the Existing Sukuk (payable at closing)
The Company has made available on its website (www.danagas.ae), a presentation that includes key Transaction terms, next steps, and an update on certain business operations.
The Company is being advised by the Blackstone Group International Partners LLP, Deutsche Bank (as Dealer Manager) and Latham & Watkins LLP. The Ad Hoc Committee is being advised by Moelis & Company UK LLP and Linklaters LLP.
For media enquiries only, please contact:
Brunswick
Azadeh Varzi / Alex Blake Milton
Tel: +442074045959 / +97144466270
Email: ‘,true);
Company Advisors:
The Blackstone Group International Partners LLP
Martin Gudgeon / Shirish Joshi
Tel: +44 20 7451 4398 / +44 20 7451 4067
Email: ‘,true);
Deutsche Bank AG, London (as Dealer Manager)
Reid Payne / Ege Akcasoy
Tel: +44 20 7547 6153
Email: reid.payne@db.com / ege.akcasoy@db.com
Deutsche Bank AG, Filiale Dubai
Rami Tabbara
Te: +971(4)4283951
E-mail: rami.tabbara@db.com
Ad Hoc Committee Advisors
Moelis & Company UK LLP
Charles Noel-Johnson / James Butcher
Tel: +44 20 7634 3568 / +44 20 7634 3639
Email: ‘,true);
Cautionary Note Regarding Forward-Looking Statements and Other Disclaimers
This press release contains forward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms “believes,” “estimates,” “anticipates,” “expects,” “intends,” “may,” “will” or “should” or, in each case, their negative, or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this press release and include statements regarding our intentions, beliefs or current expectations concerning, among other things, our results of operations, financial condition, liquidity, prospects, growth, strategies and the industry in which we operate.
By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. We caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, our financial condition and liquidity, and the development of the industry in which we operate, may differ materially from those made in or suggested by the forward-looking statements contained in this press release. In addition, even if our results of operations, our financial condition and liquidity, and the development of the industry in which we operate, are consistent with the forward-looking statements contained in this press release those results or developments may not be indicative of results, conditions or developments in subsequent periods.
All forward-looking statements attributable to us are expressly qualified in their entirety by these cautionary statements. We undertake no obligation to publicly update or publicly revise any forward-looking statements, whether as a result of new information, future events or otherwise. All subsequent written and oral forward-looking statements attributable to us or to persons acting on our behalf are expressly qualified in their entirety by the cautionary statements referred to above and contained elsewhere in this press release.
Under no circumstances shall this announcement constitute an offer to sell, or the solicitation of an offer to buy, any securities nor shall there be any sale of the securities mentioned in this press release in any jurisdiction in which such offer, solicitation or sale would be unlawful. The potential transaction described in this announcement and the distribution of this announcement and other information in connection with the potential transaction in certain jurisdictions may be restricted by law and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Information regarding the potential transaction and the securities shall be contained in an offering document, if any, that may be produced by the issuer of the securities and potential investors should refer to such offering document when, and if, it becomes available. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. This communication is not, and may not be used in connection with, an offer of securities for sale or the solicitation of an offer to buy securities in the United States, Australia, Canada, Japan, Bahrain or Qatar or any other jurisdiction where such offers or solicitations are not permitted by law. The Issuer has not registered, and does not intend to register, such securities in any of these jurisdictions and does not intend to conduct a public offering of such securities in any of these jurisdictions. In particular, no such securities of the Issuer have been nor will be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and such securities may not be offered, sold or delivered within the United States or to, or for the account or benefit of, U.S. persons (as defined in Regulation S under the Securities Act) except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. This information is not to be shown or given to any person other than the recipient, and is not to be forwarded to any other person, copied or otherwise reproduced or distributed to any other person in any manner whatsoever. Failure to comply with this directive can result in a violation of the Securities Act.
Sharjah
Dec 4 2012
Dana Gas the Middle East’s first and largest regional and private-sector natural gas company, announces that it yesterday received its share of the recent payment made by Iraq’s Federal Government to the Kurdistan Regional Government.
The company’s Joint Venture in the Kurdistan Region received USD 120 million, of which the Dana Gas share of 40% is USD 48 million.
“We are pleased to receive this payment, and are working with the Kurdistan Regional Government to further address the outstanding receivables,” said Rashid Al-Jarwan, Executive Director and Acting CEO of Dana Gas.
Dana Gas is working to address outstanding receivables from its operations in both Egypt and the Kurdistan Region of Iraq. In Egypt the government has been settling the company’s receivables for current production and working pro-actively with the company to address the USD 200 million of receivables from 2011.
The company recently reported substantial growth in 9-month profits, and has seen sustained growth in production, revenues and profits since inception in 2005.
Sharjah
Nov 29 2012
Dana Gas PJSC (Company) hereby announces that Standstill Agreement dated 6 November 2012 between the Company and Ad Hoc Committee of Sukuk Certificateholders has expired by close of business day on 29 November 2012.
Sharjah
Nov 22 2012
Dana Gas the Middle East’s first and largest regional and private-sector natural gas company has signed a set of agreements with the Sharjah and Ajman Governments to jointly develop the shared field located around 40 kilometers off the two coasts. These included a unitization agreement for management of the shared field, gas sales and purchase agreements, and the joint operating agreement.
The agreements were signed by HE Sheikh Sultan bin Ahmed Al Qasimi, Deputy Chairman of Petroleum Council Signed on behalf of Government of Sharjah, and HE Sheikh Ahmed bin Humaid Al Nuaimi The representative of the Ruler of Ajman for Financial and Administrative Affairs on behalf of the Government of Ajman, and Mr. Rashid Saif
Al-Jarwan, Executive Director and Acting CEO of Dana Gas.
The agreements cover the development of the gas field discovered in the area by drilling horizontal wells and installation of offshore platform for process of gas production via offshore pipeline of 25 km. Initial gas production from the field is planned for the first half of 2014.
On this occasion Dana Gas Executive Director Rashid Al-Jarwan said:
“Dana Gas is proud to play the positive role in developing the gas field, marking the first exploration and production project for the company in the UAE and GCC region. The produced gas will be used mainly for power generation which will make significant savings in fuel cost. We look forward to a long and fruitful partnership with the Governments of Sharjah and Ajman.”
Dana Gas has been expanding in all areas of the natural gas industry across the Middle East and North Africa Region, including the upstream exploration and production for natural gas, such as in Egypt where the Company is the 6th largest gas producer, and recently announced commencement of production from its joint-venture, the Egyptian Bahrain Gas Derivatives Company (“EBGDCo”) NGL extraction plant region at Ras Shukheir, first of its kind in the Gulf of Suez region. In Kurdistan Region of Iraq the Company completed its 4th year of production, which reached up to 80,000 barrels of oil equivalent per day.
Sharjah
Nov 7 2012
Dana Gas PJSC, (‘Dana Gas’ or ‘the Company’), the Middle East’s first and largest regional private sector natural gas company, is pleased to announce that it has reached an in-principle agreement (the “Agreement”) on the restructuring terms of the US$1 billion Sukuk-al-Mudarabah due 31 October 2012 (the “Sukuk”) with the Ad Hoc Committee of Sukukholders (the “Ad Hoc Committee”). The Ad Hoc Committee holds a majority of the outstanding Sukuk.
The Agreement envisages that $80mn of the Sukuk currently held by the Company will be cancelled and that Sukukholders will receive a partial paydown from the Company’s balance sheet cash. The remaining Sukuk will be reinstated as two pari passu instruments comprising a New Ordinary Sukuk and a New Convertible Sukuk which will have revised economic terms.
Dr. Adel Khalid Al-Sabeeh, Chairman of the Board of Dana Gas said,
“We are very pleased to have reached an agreement, which we believe best preserves the interests of all stakeholders. We now have a clear way forward that will allow the management of Dana Gas to concentrate on building value from our very promising interests in Egypt and the Kurdistan region of Iraq. We look forward to a very promising future as MENA’s leading independent gas producer.”
Dana Gas confirms that the profit payment due on 30 October 2012 has been paid. The Company also confirms that it has entered into a standstill agreement with the Ad Hoc Committee. In the meantime, the parties are working in good faith to agree a lock-up agreement. Detailed terms of the restructuring and implementation details will be announced by the Company upon signing of the lock-up agreement and will be subject to approval by the relevant regulatory authorities, Company’s shareholders, and Sukukholders at meetings to be convened in due course. All of these steps and procedures are customary in transactions of this nature.
The Company is being advised by the Blackstone Group International Partners LLP, Deutsche Bank and Latham & Watkins LLP. The Ad Hoc Committee is being advised by Moelis and Company UK LLP and Linklaters LLP.
4 November 2013
Sharjah,
Dana Gas, the Middle East’s largest regional private sector natural gas company, announces its financial results for the third quarter and nine month ended 30 September 2013 with a net profit of AED 102 million (US$28m) and AED 443 million (US$121m) respectively.
Gross revenue for the third quarter was significantly higher at AED 623 million (US$170m), an increase of 21% on Q3 2012. Earnings before interest, tax, depreciation, amortisation and exploration (EBITDAX) was AED 340 million (US$93 million) which was considerably higher by AED 23 million (US$6m) than in Q3 2012. Net profit remained flat year-on-year due to higher royalty and higher depreciation in line with higher production in Egypt. Accordingly, the Group posting a net profit of AED 102 million (US$28m) in Q3 2013 compared to AED 104 million (US$29m) in Q3 2012.
For the nine months ended September 2013 also, the Company posted gross revenues and net profit of AED 1.708 billion (US$466m) and AED 443 million (US$121m) respectively. In comparison, the Company recorded figures of AED 1.766 billion (US$482m) and AED 491 million (US$134m) respectively in 9 months 2012. This reduction in nine-months profit was due to lower realised hydrocarbon prices, suspension of LPG production since mid-2012 and a one-off higher cost of sales in 2Q 2013 in the Kurdistan Region of Iraq. Consequently, the nine months 2013 EBITDAX was AED 956 million (US$261m), down from AED 1.139 billion (US$311m) in the nine months ended September 2012.
The Company’s average production volumes were substantially higher in the third quarter at 66,850 barrels of oil equivalent per day (boepd), an increase of 17% on Q3 2012 (57,000 boepd) and 8% increase on Q2 2013 (61,700 boepd). This significant increase in production was driven by Egypt, which saw a sharp increase in quarterly production of around 30% to 39,350 boepd from 30,400. Dana Gas’s share of production in Kurdistan Region of Iraq (‘KRI’) for Q3 2013 remained stable at 27,100 boepd, up 2% quarter-on-quarter and similar to the Q2 2013 output of 27,000 boepd.
In October 2013, Dana Gas Sukuk was awarded the International Finance Law Review Award for the Middle East Restructuring Deal of the Year for its Sukuk restructuring. In May 2013, Dana Gas PJSC completed the refinancing of its US$1 billion Trust Certificates (Sukuk-al-Mudarabah) issued by Dana Gas Sukuk Limited.
Commenting on the results, Dr. Patrick Allman-Ward, Chief Executive Officer of Dana Gas, said: “Our third quarter results reflected yet another strong operational performance, particularly in Egypt. Our overall average production numbers are ahead by 17% to 66,850 boepd on a quarter-on-quarter basis. This demonstrates the inherit quality of our assets and the ability of Dana Gas employees to deliver value from these resources. We have been given strong indications by the Egypt government regarding planned payments in the next few months” added Dr. Patrick. “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.”
Production and Development
Dana Gas Egypt’s gas, LPG, condensate and crude oil output averaged 39,350 boepd in Q3 2013, a massive increase of around 30% over Q3 2012 average production. During the period, the Company had also announced that it reached record gas production levels equivalent to 41,500 boepd (including over 8,000 barrels per day of associated liquids), the highest level in two years and representing a growth of around 30% over the 2012 average production.
In the Kurdistan Region of Iraq, the Company’s share of production in the Khor Mor Field for the third quarter averaged 27,100 boepd (Q3 2012: 26,600 boepd). The reconstruction and upgrading of the LPG loading facilities at the Khor Mor processing facility is complete and the plant has the capacity to produce up to 900 tonnes per day of LPG, the equivalent of 10,000 boepd.
Together, the Group’s net production averaged 66,850 boepd, a significant increase of 17%, from its interests in Egypt and the KRI during the third quarter ended 30 September 2013.
Liquidity and Financial Resources
Cash balance, as of 30 September 2013, stood at AED 674 million (US$184m) (30 June 2013: AED 792 million (US$216m)). This, in addition to the Company’s other liquid investments allows the company to follow a prudent cash utilisation policy in terms of fulfilling its business-critical capital expenditures and operating expenses and meeting its financial obligations.
Overall trade receivables, as of 30 September 2013, stood at AED 2,775 million (US$757m).
In Egypt, Dana Gas collected AED 30 million (US$8m) in Q3 2013 against its receivables (Q3 2012: AED 117 million (US$ 32m)) and, as of 30 September 2013, the trade receivable amount was AED 1,093 million (US$298m) (30 June 2013: AED 960 million (US$262m)).
In the Kurdistan Region of Iraq, Dana Gas collected AED27 million (US$ 7m) in Q3 2013 against its share of receivables in Kurdistan (Q3 2012: AED 73 million (US$ 20 million)) and, as of 30 September 2013, the balance was at AED 1,646m (US$450m) (30 June 2013: AED 1,473 million (US$402m)).
Dana Gas is actively engaged in ongoing dialogue with relevant government authorities in Egypt and the Kurdistan Region of Iraq regarding receivables and its future capital expenditure plans. In the interim, the company continues to follow a prudent cash utilization policy and a calibrated capital expenditure programme.
Zora (UAE) Project Update
The Zora Project agreements between Sharjah and Ajman Governments of the UAE were signed jointly to develop the shared field located around 40 kilometres off the two coasts. These included a unitization agreement for management of the shared field, gas sales and purchase agreements, and the joint operating agreement.
Discussions on the project are close to completion in order to award the contract for fabrication and installation of the offshore unmanned platform. As the project enters a new phase (fabrication and construction), a dedicated team, formed by Dana Gas, is driving the project to completion.
Exploration & Appraisal
During the period, Dana Gas Egypt was successful in bringing online production from the
tie-in of South Abu El Naga wet gas well and Allium in the West El Manzala concession; West Sama in West El Qantara concession and West El Baraka in Komombo concession.
Arbitration
On 21 October 2013, Dana Gas, along with Crescent Petroleum and Pearl Petroleum has commenced arbitration proceedings at the London Court of International Arbitration (LCIA), in order to confirm certain contractual rights under their Agreement with the Kurdistan Regional Government of Iraq (KRG), which was signed in April 2007 and is governed by English Law.
Sharjah
Nov 1 2012
Dana Gas PJSC, (‘Dana Gas’ or ‘the Company’), the Middle East’s first and largest regional private sector natural gas company, provides an update on the status of the $1bn Sukuk-al-Mudarabah (the “Sukuk”) which matured at midnight yesterday.
Dana Gas is in ongoing discussions with an Ad-hoc Committee of Sukuk holders over terms to amend and extend the Sukuk. The desirability to amend and extend the terms of the Sukuk became evident in the interests of all stakeholders owing to the recent liquidity challenges that have emerged as a result of challenging external macro-economic and political circumstances in the region, including the extensively reported problems of payment delays where the Company operates.
As discussions continue, The Company has not paid the principal amount of US $ 920 million due on 31 October 2012 and the accrued profit amount of $ 18.75 million due on 30 October 2012 as they are the subject of the aforesaid discussions. Until this date, the Company has consistently honoured its payment obligations. To date, $356 million has been paid to Sukuk holders over the last 5 years.
The Company believes that the aforesaid liquidity challenges are short term and is encouraged by recent developments regarding receivables due to Dana Gas. The Egyptian Government in particular made significant efforts to address the backlog of payments due to Dana Gas PJSC. In the meantime, operations continue as normal and unabated. Most recently, the Company has announced a new gas discovery at West Sama-1 in the Nile Delta, and the commencement of production from its joint-venture with Egyptian Government-owned EGAS, the Egyptian Bahrain Gas Derivatives Company (EBGDCo), to produce NGL at Ras Shukeir.
Dana Gas remains committed to finding a consensual solution that is fair and equitable to all stakeholders and will make further announcements in line with the progress of discussions.
The Company is being advised by Blackstone Group, Deutsche Bank, and Latham & Watkins.
Sharjah
Nov 1 2012
Results for nine months ended 30 September 2012
9 months to September 2012 (AED M)
9 months to 30 September 2011 (AED M)
Increase/ (Decrease) %
Gross revenue
1,766
1,888
(6)
Gross profit
1,029
993
4
Net profit
491
359
37
Production (boepd)
59,600
65,400
(9)
Dana Gas PJSC the Middle East’s largest regional private sector natural gas company, announces its financial results for the nine months ended 30 September 2012 with a net profit after tax of AED 491 million, an increase of 37% as compared to AED 359 million for the comparable period in 2011.
Revenue from the sale of hydrocarbons reduced to AED 1,766 million, with gross profit reaching AED 1,029 million. Revenues declined by 6% mainly due to a fall in natural gas production in Egypt and the temporary suspension in Q3 of LPG production in Kurdistan in Q3 2012 while maintenance and repairs are carried out to LPG storage and loading facilities.
The net profit excludes an unrealised gain of AED 139 million on Dana Gas’s 3% shareholding in MOL, the Hungarian-listed oil and gas company and a strategic partner in Dana Gas’ Kurdistan Region of Iraq (KRI) operations. This gain is booked directly to equity in line with the Company’s published accounting policy, resulting in Total Comprehensive Income of AED 630 million.
Earnings before interest, tax, depreciation, amortisation and exploration (EBITDAX) was AED 1,139 million compared to AED 1,180 million in the comparable period last year.
3 Months to September 2012
Revenue from the sale of hydrocarbons reduced to AED 512 million, with gross profit of AED 395 million. These figures represent a decrease of 21% and 12% respectively, compared to the same period of 2011. This decrease was mainly due to decline in production in Egypt and lower hydrocarbon prices during the quarter. The Company recorded a Net Profit after tax of AED 104 million in the third quarter, compared to AED 143 million in Q3 2011.
Commenting on the results, Dr. Adel AlSabeeh, Chairman of Dana Gas, said:
“Our operational strength has continued to grow steadily throughout 2012 and this is reflected in our increased profitability. While our immediate priority is to address the short-term Sukuk issue, the finances and liquidity of the company are robust, and the long term prospects for Dana Gas remain very promising.”
Rashid Al-Jarwan, Executive Director and Acting Chief Executive Officer of Dana Gas, added: ”We are encouraged that the governments of Egypt and the Kurdistan Region of Iraq are making progress on the way forward regarding outstanding payments due to Dana Gas. We enjoy cooperative relations with both governments and we remain deeply committed to expanding our operations in both Egypt and the KRI.”
Production and Development
The Group’s net production averaged 59,600 barrels of oil equivalent per day (boepd) from its interests in Egypt and the KRI during the nine months ended 30 September 2012.
Dana Gas Egypt produced gas, LPG, condensate and crude oil at an average rate of 32,000 boepd in the first nine months of 2012. Production is expected to increase later in the year as compression facilities and new production wells are added, and two new fields are brought on-stream.
In the Kurdistan Region of Iraq, the Company’s 40% share of production in the Kor Mor Field for the first nine months of the year continued to increase, achieving an average rate of 27,600 boepd (2011: 21,500 boepd). This 28% increase in production was mainly due to increased gas deliveries achieved by running the two LPG trains within the plant and the early production facility (EPF) in parallel; as well as including the condensate and LPG extracted from the additional gas.
Exploration & Appraisal
During the period, the Company drilled three exploration wells. West Sama-1 was drilled in the West Manzala Concession and was a gas discovery with evaluated in-place resources of up to 6 Billion Cubic Feet (Bcf). One further exploration well in the West Manzala Concession, “Lavender”, and another in the Komombo concession “Faris” were unsuccessful and were declared dry holes.
Liquidity and Financial Resources
Group cash balances as of 30 September 2012 stood at AED 516 million (31 December 2011: AED 411 million).
During the first nine months of 2012, the Group collected AED 549 million of receivables in Egypt. At 30 September 2012, the trade receivables balance stood at AED754 million (31 December 2011: AED 836 million).
During the first nine months of 2012, the Group collected AED 291 million of its 40% share of receivables in KRI. At 30 September 2012, the Group’s share of the trade receivables balance stood at AED 1,331 million (31 December 2011: AED 880 million).
Sukuk Update
On 1 November 2012, the Company issued a separate statement to update the market regarding the $1 billion sukuk, which is secured against certain Egyptian assets as well as SajGas and UGTC.
The sukuk matured on 31 October 2012; however an NDA agreement is in place to enable talks to continue towards finding a consensual solution that is equitable for all stakeholders. For these purposes, the Company has appointed Deutsche Bank, Blackstone Group and Latham & Watkins to provide advice for the company on various aspects of the discussions with the AD hoc Committee appointed by sukukholders. The Company will continue to provide updates as further progress is made.
Sharjah
Oct 22 2012
Dana Gas PJSC, the Middle East’s first and largest regional private sector natural gas company has announced a new gas discovery in the Nile Delta, Egypt. The discovery was at West Sama-1 in the West El Qantara Concession.
This new field discovery comes after the first successful drilling in the Komombo Concession earlier in the second quarter of the year. The new discovery is nearby to the Sama-1 and Sama-2 dry gas discoveries in the Abu Madi formation. The evaluated in-place resources for the West Sama-1 are between 4 to 6 Billion Cubic Feet (Bcf). The company is preparing a development plan for this discovery to be tied in to the nearby pipeline owned by Dana Gas. The West Sama-1 gas discovery will be tied in to the Company’s nearby South El Manzala gas processing plant within a week.
The West Sama-1 well is the first significant dry gas discovery in the Kafr El Sheikh Formation by Dana Gas in 2012 and the twenty third as a result of the aggressive exploration drilling campaign that started in 2007 and will continue throughout 2013.
Mr Rashid Al Jarwan, Dana Gas Executive Director and Acting CEO, said “Our team in Egypt continues to deliver tremendous results. We are delighted that this exploration well has been successful. It builds upon Dana Gas Egypt’s outstanding record of discoveries”. Dr. Patrick Allman-Ward, Dana Gas Egypt General Manager commented, “The well is an excellent start to 2012 drilling in the Nile Delta. We still have a sizeable portfolio of drillable prospects and our exploration activity will continue throughout the year, as will our development activities.”
Dr. Patrick continued: “The discovery at the West Sama-1 well represents a successful Dana Gas strategy of drilling shallow gas discoveries that can quickly help Egypt meet its growing demand for gas. We are delighted that our prospect generation efforts followed by an effective drilling program are continuing to produce positive results, which will boost even further the company’s production starting from this year”.
This new field discovery comes after the announcement of commencement of Dana Gas’ joint-venture, the Egyptian Bahrain Gas Derivatives Company (EBGDCo) NGL extraction plant at Ras Shukheir in Egypt. EBGDCo’s first cargo shipment of propane was achieved on 1st October 2012 signalling scheduled plant production start-up on a commercial basis. When fully operational, the plant will extract 120,000 tonnes per annum of propane & butane from a gas stream of 150 MMscfd.
Dana Gas is an operator in the Nile Delta currently producing gas and associated liquids from 11 fields, and is the 50% operator alongside Sea Dragon Energy and producing oil from one field in Upper Egypt. During 2011, Dana Gas Egypt produced 77.67 billion cubic feet of gas and 2.6 million barrels of liquids.
Dana Gas is currently the 6th highest gas producer in Egypt, a country whose gas reserves has doubled in the past 5 years to over 70 trillion cubic feet, and is among the world’s top ten exporters of LNG. In 2007 Dana Gas made Southern (Upper) Egypt’s historic first ever commercial oil discovery from its first exploration well drilled in the Komombo Concession. The Company is firmly committed to pursuing further investments, in partnership with the national Egyptian companies and other energy companies from the region and internationally.
Sharjah
Oct 20 2012
Ras Shukheir joint-venture project loads first cargo
Dana Gas PJSC, the Middle East’s largest private sector natural gas company, announces that its joint-venture, the Egyptian Bahrain Gas Derivatives Company (“EBGDCo”) NGL extraction plant region at Ras Shukheir in Egypt, first of its kind in the Gulf of Suez region, has loaded its first propane cargo on 1 October, 2012.
EBGDCo’s first cargo shipment of propane was achieved on 1st October 2012 signalling scheduled plant production start-up on a commercial basis. The plant receives feed gas from the nearby Unit 104 plant of Egyptian General Petroleum Corporation (EGPC) at a rate of 55 million standard cubic feet per day (MMscfd) to 80 MMscfd. When fully operational, the plant will extract 120,000 tonnes per annum of propane & butane from a gas stream of 150 MMscfd. The feed gas rate is expected to increase gradually once gas is received from gas fields in and around Ras Shukheir area.
Rashid Al Jawan, Executive Director and Acting CEO of Dana Gas, said:
“We are extremely pleased to complete this plant with our joint-venture partners. It is an important part of our long-term programme in Egypt, in terms of supporting their energy sector, and we are pleased that this has now been successfully completed. The Ras Shukheir plant is now our third gas processing plant to be commissioned in Egypt and we expect first revenue and cash flows in this quarter.”
The total cost of the project was AED 460 million, which was partly funded through AED 318 million of project finance and AED 105 million of equity, with the remaining to be funded through internal revenue. Dana Gas has contributed AED 28 million as it’s share of equity.
The gas liquids extraction plant is a valued added project and is adjacent to EGPC’s Unit 104 gas plant at Ras Shukheir. The gas processing and marketing of liquid propane and butane are the main activities of the project. The plant is expected to recover 100% of the butane in feed gas form and 97% in propane form. The butane is sold in Egypt whilst the propane is destined to international markets. The residual gas will be supplied to the National Gas grid.
Dr. Patrick Allman-Ward, General Manager, Dana Gas Egypt, adds:
“This project exemplifies the cooperation between Dana Gas and EGPC to deliver LPG to both the domestic and international market. Their involvement will ensure the success of this cornerstone project and will contribute significantly towards our group production figures in Egypt.”
The project has taken over two years to complete. Dana Gas has 26.4% interest in EBGDCo. The interest is held through Dana Gas’ 66% ownership of Danagaz Bahrain. Other shareholders include Egyptian Natural Gas Holding Company (EGAS) with 40% shareholding and Arab Petroleum Investments Corporation (APICORP), a pan-Arab financial institution based in Saudi Arabia, with 20%.
Dana Gas is an operator in the Nile Delta currently producing gas and associated liquids from 11 fields, and is the 50% operator alongside Sea Dragon Energy and producing oil from one field in Upper Egypt. During 2011, Dana Gas Egypt produced 77.67 billion cubic feet of gas and 2.6 million barrels of liquids.
Dana Gas is currently the 6th highest gas producer in Egypt, a country whose gas reserves has doubled in the past 5 years to over 70 trillion cubic feet, and is among the world’s top ten exporters of LNG. In 2007 Dana Gas made Southern (Upper) Egypt’s historic first ever commercial oil discovery from its first exploration well drilled in the Komombo Concession. The Company is firmly committed to pursuing further investments, in partnership with the national Egyptian companies and other energy companies from the region and internationally.
Sharjah
Oct 14 2012
Dana Gas, the region’s first regional private-sector natural gas company, and Crescent Petroleum, the oldest Middle East private oil and gas company, in their capacity as joint operator of the Khor Mor field, have announced that total production in their gas operations in the Kurdistan Region of Iraq has reached 80,000 barrels of oil equivalent per day at the 4th anniversary of production. Total investment to date is close to US$1 billion and total cumulative petroleum production to date has exceeded 67 million barrels of oil equivalent, making it the largest by the private sector in Iraq’s oil and gas sector.
The daily production includes 340 million cubic feet of gas per day and 15,000 barrels per day of condensate liquids, and there are plans for further expansion. In total, over 279 billion cubic feet of gas and 13 million barrels of condensate liquids have been produced by the companies since the start of production in October 2008, with the gas supply to local power stations enabling 1,750 MW of new electricity supply locally.
This has ensured almost continuous power supply for 4 million people in the Kurdistan Region, in contrast to the electricity crisis in other parts of Iraq, and provided US$5.4 billion of savings in fuel costs for the government, with annual savings of $2.5 billion going forward and major environmental benefits in cutting greenhouse gas emissions while transforming and energizing the economic and social development of the entire region at the same time.
“We are proud to be the largest investors in the Kurdistan Region’s oil and gas sector, and the highest petroleum producers since our first production four years ago, which enables electricity supply for millions of Iraqis and billions of dollars of ongoing fuel savings for the government,” said Mr. Majid Jafar, CEO of Crescent Petroleum and Member of the Dana Gas Board of Directors. “We are working with the KRG Ministry of Natural Resources on the next phase of development and expansion, to grow our operations and enable further progress and prosperity for the local community.”
Marking the fourth anniversary of continuous production by the partners, Mr. Rashid Al-Jarwan, Executive Director and Acting CEO of Dana Gas, said: “This important milestone has been achieved with the cooperation and support of the KRG, as well as our partners, contractors and local staff. In addition we are working with the KRG to improve and resolve the outstanding receivables, and are very encouraged by the recent announcement on the resumption of payments from the Federal Government.”
The project partners had by the end of September 2012 invested a total of US$975 million under contracts signed with the Kurdistan Regional Government (KRG) for the Khor Mor and Chemchemal blocks in April 2007. Major achievements of the project so far include: installing a 180km gas pipeline across challenging mountainous terrain that required the clearing of minefields; first gas production after only 16 months; drilling successfully to tertiary reservoir formations at depths of 2,300 metres, and importing and installing over 64,000 tonnes of equipment in over 3,500 truck-loads, with pipe material supplied from China and Thailand, and the state-of-the-art gas processing plant imported from the USA.
During the project’s construction phase, work opportunities were provided for over 2,000 Iraqi workers from all ethnic groups and sects, supported by expatriate workers from over 20 nationalities in the region and worldwide. The companies have successfully implemented a nationalisation programme, and already achieved the target of 80% local staff ratio in their operations by the end of 2011, while currently implementing a major training programme for local staff.
Crescent Petroleum and Dana Gas have also implemented a corporate social responsibility programme to support the local communities, including providing school supplies, drinking water treatment, generators and fuel enabling 24 hour electricity for the local villages, mobile medical units, and youth sports facilities. These initiatives are assisting the local communities in improving their standard of living, health, well-being, security and stability and the development of human capital in the Kurdistan Region.
Erbil International Trade Fair
As a show of support for the region and to enhance business relationships, Dana Gas and Crescent Petroleum are both participating at the Erbil International Fair 2012 as a member of delegation from Sharjah Government headed by H.E. Sheikh Sultan Bin Ahmad Al Qasimi, Deputy Chairman, Sharjah Petroleum Council and a Board Member of Dana Gas. The companies will join 30 other firms from UAE at the event which will take place from 15 to 18 October 2012.
To mark the visit, Mr. Rashid Al-Jarwan, Executive Director and Acting CEO of Dana Gas, added:
“The Erbil International Fair is an important exhibition for us to attend. It is the largest trade fair in Iraq. The event offers us a targeted platform to meet Government officials and the larger business community to highlight our achievements and seek potential opportunities. Economic links between the Kurdistan Region of Iraq and the UAE are growing strong and we look forward to continue playing a significant role in the future of the Kurdistan Region of Iraq.
The Erbil International Fair is in its 8th year and is a multi-sector trade fair, attracting over 850 exhibitors from 22 countries and showcasing a wide selection of products and services. Sectors represented include; engineering, electronics, construction, energy and education. The exhibition is the largest trade fair organised in Iraq and around 75,000 visitors are expected to attend.
Sharjah
Sep 24 2012
Board Member Majid Jafar says describes “a permanent process of improvement”
Majid Jafar, a Board Member of Dana Gas PJSC, addressing the “Board of Directors 2012” conference yesterday, emphasised the importance of best practice corporate governance at the company, as he described the journey taken by the Board of Directors since the formation of Dana Gas in 2005, which has led to the company being recognised as a leader in this area by the International Finance Corporation (IFC) of the World Bank Group.
Mr. Jafar, who is also CEO of Crescent Petroleum and Vice-Chairman of the Crescent Group, described how the Board of Dana Gas, which is the region’s leading private sector natural gas company, and is listed on the Abu Dhabi stock exchange, was carefully designed from the inception of the company, to ensure the right mix of skills and nationalities, as well as the right balance between executive directors, major shareholders, and independent directors.
He also highlighted the emphasis placed by the company on setting high standards for corporate governance while respecting regional culture, and in seeking external international advice. This has led to Dana Gas achieving awards for good corporate governance by the regulatory bodies, and being named a Best Practice company for the Middle East region by the International Finance Corporation (IFC), the private sector arm of the World Bank. Majid Jafar served as the first Chairman of the Corporate Governance Committee of Dana Gas, and is an Accredited Director of the Institute of Directors – IoD Mudara.
“Realizing best Corporate Governance practices was essential for building a strong brand in the international Oil and Gas sector”, Jafar told the conference attendees, adding: “The Dana Gas Board is committed to ensuring long term value for its shareholders, and strongly believes in the role of proper Corporate Governance in the realization of growth – and defining appropriate strategic objectives serving such growth”.
Mr. Jafar explained to the audience the developments undertaken by the board over the last couple of years, which included the establishment of an internal Control Department and the hiring of an “Internal Control Manager” at Group Level – in compliance with the Security and Commodities Authority (SCA)’s regulations thus strengthening the control environment and establishing the foundations of “Internal Control”. Other achievements he highlighted were implementing the Annual Audit Plan, starting Internal Audit Activities, and in 2010 approving and communicating the “Code of Insiders Dealings” – followed by its rollout in 2011 alongside the implementation of the Internal Control.
“It is this parallel engagement on all aspects of Best Practice in corporate governance which led Dana Gas to be featured in three pages in the IFC’s 2010 Corporate Governance Success Stories magazine”, Mr. Jafar emphasized while reiterating the importance of seeing “governance as a permanent process and not a whim or a public relations initiative”.
The Board of Directors 2012 conference is being held at the Media Rotana Hotel on the 24th and 25th of September, and brings together a large number of senior management officers and directors from across the region to discuss various topics ranging from board governance and effectiveness, board composition, director roles and accountabilities, board structures, board delivery, effective board dynamics and board evaluation and renewal.
Results for six months ended 30 June 2012
30 June 2012 (AED M)
30 June 2011 (AED M)
Increase %
Gross revenue
1,254
1,243
1
Gross profit
767
678
13
Net profit
387
216
79
Production (boepd)
60,950
65,600
(7%)
Dana Gas PJSC the Middle East’s largest regional private sector natural gas company, announces its financial results for the six months ended 30 June 2012 with a net profit after tax of AED 387 million, an increase of 79% as compared to AED 216 million in H1 2011.
Revenue from the sale of hydrocarbons increased to AED 1,254 million, with gross profit reaching AED 767 million. These figures represent increases of 1% and 13% respectively, compared to the same period last year. This is due to production growth in Kurdistan Region of Iraq (KRI) coupled with higher market prices for oil, condensate and LPG during the first six months of 2012.
The above net profit excludes an unrealised loss of AED 19 million on Dana Gas’ 3% shareholding in MOL, the Hungarian-listed oil and gas company and a strategic partner in Dana Gas’ Kurdistan operations. This loss is booked directly to equity in line with the Company’s published accounting policy, resulting in Total Comprehensive Income of AED 368 million.
Earnings before interest, tax, depreciation, amortisation and exploration (EBITDAX) was AED 822 million compared to AED 814 million in the same period last year.
Commenting on the results, Dr. Adel AlSabeeh, Chairman of Dana Gas, said:
“We have achieved our revenue estimates for the first half and posted strong net profit figures of AED 387 million. Our revenue collections were in line with expectation and we continue to have constructive discussions with both the Government of Egypt and the Government of the Kurdistan Region of Iraq on payment of the Company’s receivables. Overall this has been a reasonable six months financially and we look forward to the rest of the year with renewed confidence.”
Ahmed Al-Arbeed, Chief Executive Officer of Dana Gas, added:
“We have maintained strong levels of net production in the first half of the year. Good progress is being made on our drilling programme in Egypt, with one new field discovery (the West Al Baraka Field) in the South of the country. We plan to drill further exploration and development wells in Northern Egypt. I am also pleased to report that the commissioning and start-up of the Natural Gas liquids plant in Ras Shukheir (Egypt) is advancing well and should be operational in H2 of this year.”
Production and Development
The Group’s net production averaged 60,950 barrels of oil equivalent per day (boepd) from its interests in Egypt and the KRI during the six months ended 30 June 2012.
Dana Gas Egypt produced gas, LPG, condensate and crude oil at an average rate of 32,750 boepd in the first half. Production is expected to increase later in the year as compression facilities and new production wells are added, and two new fields are brought on-stream.
In the KRI, the Company’s 40% share of production in the Kor Mor Field for the first half of the year continued to increase, achieving an average rate of 28,200 boepd (2011: 19,800 boepd). This 42% increase in production was mainly due to increased gas deliveries achieved by running the two LPG trains within the plant and the early production facility (EPF) in parallel; as well as including the condensate and LPG extracted from the additional gas.
Exploration & Appraisal
The Company drilled and tested a successful exploration well, West Al Baraka-2, in the Komombo Concession in Southern Egypt. A reservoir hydraulic fracturing test (frac) was performed in June to optimize the production rates and assess the hydrocarbon potential. After performing the hydraulic fracturing, the well productivity was increased from 30 boepd to 173 boepd, a five-fold increase in production. In order to better understand the formation productivity performance, reservoir extension, pressure support regime and make a decision on the number of wells required for the full development of the field, Dana Gas plans to place the well on long-term testing, utilizing portable testing equipment.
Faris-1 well, the 2nd exploratory well to be drilled in the Komombo concession was spudded in late June. The well will be drilled to a total depth of 6,300 ft (SS) to explore the hydrocarbon potential in the Komombo “A” formation.
Liquidity and Financial Resources
Group cash balances as of 30 June 2012 stood at AED 601 million (31 December 2011: AED 411 million).
Dana Gas’s cash flow has been impacted by global macroeconomic and regional events. The revolution in Egypt last year and the subsequent unfolding turmoil resulted in sporadic and progressively delayed payment of revenue by government-owned entities. Similarly, political disputes in Iraq have impacted planned payments by the central government to petroleum companies operating in the KRI. Despite these challenging external macroeconomic circumstances, Dana Gas hopes that these problems will resolve themselves in the short- and medium-term.
Sukuk Update
The $1 billion sukuk, secured against certain Egyptian assets as well as SajGas and UGTC, are due to mature on 31 October 2012. The Company is committed to finding a consensual solution that is equitable to all stakeholders. For these purposes, the company has appointed Deutsche Bank, Blackstone Group and Latham & Watkins to provide advice on various options for discussions with the sukukholders. The Company will provide further updates as further progress is made.
Sharjah
Aug 8 2012
Project Investment approaches $1 billion – the highest in Kurdistan Region of Iraq. 258 billion cubic feet of gas and 12.1 million barrels of condensate. liquids produced
Leading Middle East private oil and gas company Crescent Petroleum and its partner and affiliate Dana Gas PJSC, the region’s first private-sector natural gas company, have, in their capacity as joint operator of the Kor Mor field, announced that total production in their major gas operations in the Kurdistan Region of Iraq has grown steadily to reach 70,000 barrels of oil equivalent per day, with total investment to date approaching US$1 billion. The production includes 330 million cubic feet of gas per day and 15,000 barrels per day of condensate liquids, and there are plans for further expansion.
In total, over 249 billion cubic feet of gas and 11.7 million barrels of condensate liquids have been produced by the companies since the start of production in October 2008, with the gas supply to local power stations enabling 1,750 MW of new electricity supply. This has ensured almost continuous power supply for 4 million people in the Kurdistan Region, in contrast to the electricity crisis in other parts of Iraq, and provided billions of dollars of savings in fuel costs for the government and very significant environmental benefits in cutting down pollution and greenhouse gas emissions, while transforming the economic and social environment.
“We are proud to be the largest investors in the Kurdistan Region’s oil and gas sector, and to have already enabled major economic and social benefits for the people of the Kurdistan Region and all of Iraq, especially with the improved and secure electricity supply,” said Mr. Majid Jafar, CEO of Crescent Petroleum and Member of the Dana Gas Board of Directors. “We are in discussions with the KRG Ministry of Natural Resources on the next phase of development and expansion, to grow our operations and enable further progress and prosperity for the local community.”
The project partners had by the end of June invested a total of US$963 million under contracts signed with the Kurdistan Regional Government (KRG) for the Khor Mor and Chemchemal blocks in April 2007. Major achievements of the project so far include: installing a 180km gas pipeline across challenging mountainous terrain that required the clearing of minefields; first gas production after only 16 months; drilling successfully to tertiary reservoir formations at depths of 2,300 metres, and importing and installing over 64,000 tonnes of equipment in over 3,500 truck-loads, and state-of-the-art gas processing plant imported from the USA.
Marking the production milestone, Mr. Rashid Al-Jarwan, Executive Director of Dana Gas, said: “This important milestone has been achieved with the cooperation and support of the KRG, as well as our partners, contractors and local staff. In addition regular payments are now being received by the producing companies, and we are working with the KRG to improve and resolve the outstanding receivables.”
During the project’s construction phase, work opportunities were provided for over 2,000 Iraqi workers from all ethnic groups and sects, supported by expatriate workers from over 20 countries regionally and worldwide. The companies have successfully implemented a nationalization programme, and already achieved the target of 80% local staff ratio in their operations by the end of 2011.
Crescent Petroleum and Dana Gas have also implemented a corporate social responsibility programme to support the local communities, including providing school supplies, drinking water treatment, generators and fuel enabling 24 hour electricity for the local villages, mobile medical units, and youth sports facilities. These initiatives are assisting the local communities in improving their standard of living, health, well-being, security and stability and the development of human capital in the Kurdistan Region.
Sharjah
Aug 7 2012
Dana Gas Chairman Mr. Hamid Jafar addressing the World Economic Forum in Istanbul on “New Energy Corridors” on 5th June 2012
Watch Video
https://www.youtube.com/watch?v=0pH5jTVVBUw
Sharjah
Jun 24 2012
LPG Trucks’ Fire Incident at Khor Mor Plant
On Friday, 22 June 2012, two LPG road tankers, belonging to a local LPG trader, caused a fire during filling at the loading facility of Khor Mor LPG Plant in Kurdistan Region of Iraq. The accompanied explosion resulted into four injuries and one fatality of a tanker driver thereby causing extensive damage to the loading facility.
With full Corporation and support of the all the government institutions in the Kurdistan Region Government immediate medical support was available to the injured and fire- fighting teams extinguished the fire within two hours. As a precautionary measure, the plant has been temporarily shut down while a full investigation is conducted and repairs are carried out. A partial production restarted yesterday Saturday from the Early Production Facility producing and supplying gas to the power stations.
Sharjah
May 15 2012
DANA GAS: Results for 3 months to 31 March 2012
31 March 2012(AED M)
31 March 2011(AED M)
Increase %
Gross revenue
700
616
14
Gross profit
451
337
34
Net profit
206
92
124
Production (boepd)
63,000
66,800
(5.5)
Dana Gas PJSC, the Middle East’s largest regional private sector natural gas company, announces its financial results for the first quarter ended 31st March 2012 with a net profit after tax of AED 206 million, more than double that reported in the first quarter of 2011.
Financials
Gross revenue of AED 700 million (Q1 2011: AED 616 million) was achieved from the sale of hydrocarbons, and gross profit for the period of AED 451 million (Q1 2011: AED 337 million), representing increases of 14% and 34% respectively.
Net profit was AED 206 million (Q1 2011: AED 92 million), a 124% rise, arising principally from higher realised hydrocarbon prices during the quarter. The above Net Profit excludes an unrealised gain of AED 135 million on Dana Gas’s 3% shareholding in MOL, the Hungarian listed oil and gas company and a strategic partner in Dana Gas’s Kurdistan Region of Iraq (KRI) operations. This gain is booked directly to equity in line with the Company’s published accounting policy, resulting in Total Comprehensive Income for Q1 2012 of AED 341 million.
Earnings before interest, tax, depreciation, amortisation and exploration (EBITDAX) were AED 459 million (Q1 2011: AED 403 million), an increase of 14%. The revenue collections attributable to the Group during the quarter were AED 335 million of which AED 192 million was collected in Egypt and AED 143 million representing the Company’s 40% share of collections in KRI. The Company’s cash flow has been affected by macroeconomic and regional events which resulted in delayed revenue collections from its customers being mainly government entities.
Commenting on the results, Hamid Jafar, Board Chairman of Dana Gas, said:
“We have achieved our revenue estimates in the first quarter and posted strong net profit figures of AED 206 million. Our revenue collections were in line with expectation and we continue to have constructive discussions with both the Government of Egypt and the Government of the Kurdistan Region of Iraq on payment of Company’s receivables. Overall, however, this has been a reasonable quarter financially and we look forward to the rest of the year with renewed confidence.”
Ahmed Al-Arbeed, Chief Executive Officer of Dana Gas, added:
“We have maintained strong levels of net production in the first quarter. Good progress is being made on our drilling programme in Egypt, with one new field discovery (the West Al Baraka Field) in the South of the country. We plan to drill further exploration and development wells in Northern Egypt. I am also pleased to report that the commissioning and start-up of the Natural Gas liquids plant in Ras Shukheir (Egypt) is advancing well and should be operational in Q2 of this year.”
Production and Development
The Group’s Net Production averaged 63,000 barrels of oil equivalent per day (boepd) from its interests in Egypt and the KRI during first quarter of 2012.
Dana Gas Egypt produced gas, LPG, condensate and crude oil at an average rate of 34,500 boepd in the first quarter. Production is expected to increase later in the year as compression facilities and new production wells are added, and two new fields are brought on stream.
In the Kurdistan Region of Iraq, the Company’s 40% share of production in the
Kor Mor Field continued to increase, achieving an average rate of 28,500 boepd (2011: 19,500 boepd). This 46% increase in production was mainly due to increased gas deliveries achieved by running the 2 trains of the LPG plant and the early production facility (EPF) in parallel, and including the condensate and LPG extracted from the additional gas.
Exploration & Appraisal
The Company drilled and tested a successful exploration well, West Al Baraka-2, in the Komombo Concession in Southern Egypt. A reservoir fracturing test will be run in June to optimize the production rates and assess the hydrocarbon potential.
Liquidity and Financial Resources
Group cash balances as at 31 March 2012 stood at AED 524 million (31 December 2011: AED 411 million).
Dana Gas’s cash flow has been impacted by global macroeconomic and regional events. The revolution in Egypt last year and the subsequent unfolding turmoil in Egypt resulted in sporadic and progressively delayed payment of revenue by government-owned entities. Similarly, political disputes in Iraq have impacted planned payments by the central government to petroleum companies operating in the KRI. Despite these challenging external macroeconomic circumstances, Dana Gas hopes that these problems will resolve themselves in the short- and medium-term.
Sukuk Update
$1 billion sukuk, secured against certain Egyptian assets as well as SajGas and UGTC, are due to mature on 31 October 2012. Although the economic realities outlined above affected Dana’s ability to raise new funding, the Company is committed to finding a consensual solution that is equitable to all stakeholders. For these purposes, the company has appointed Deutsche Bank, Blackstone Group and Latham & Watkins as its financial and legal advisors to advise on various options for discussions with the sukukholders and their advisors. The Company will provide further updates as further progress is made.
Sharjah
Apr 26 2012
Company AGM Reviews and Approves 2011 Operations Report & Financial Results
Dana Gas, the Middle East’s largest regional private sector natural gas company, held its 2011 Annual General Meeting (AGM) on Thursday 26 April 2012, Chaired by the Company’s Honorary Chairman H.E. Sheikh Ahmed Bin Sultan Al Qasimi.
Dana Gas’ Chairman, Mr. Hamid Jafar, reported on the Company’s 2011 business activities and financial performance. The AGM approved the Board of Directors’ report on the Company’s activities and the financial statements together with the Auditors report for the year ended 31 December 2011.
When giving an overview on financials, receivables and growth, Mr Hamid Jafar, Chairman of Dana Gas, said in a statement to shareholders at the AGM: “2011 proved to be a very successful year for the Company’s operations, despite the regional political and economic unrest. The oil and gas sector, particularly in Egypt and Kurdistan Region of Iraq, is facing financial challenges in the short term and we are working together with the host governments to maintain their supply of gas whilst agreeing payment plans for overdue monies that are aligned to our shareholders’ interests and the respective countries.”
For 2011, the company achieved gross revenues of AED 2.53 billion, a 42% increase on last year due to higher production during the year coupled with higher international hydrocarbon prices. This resulted in a record gross profit of AED 1.33 billion.
Dana Gas has three principal areas of operations: Egypt, the Kurdistan Region of Iraq, and the UAE. Mr Jafar provided shareholders with an update on the Company’s activities in each area starting from Egypt, where production in 2011 was 15.5 million barrels of oil equivalent (mmboe), averaging 42,500 barrels of oil equivalent per day (boepd). Additional production during the year from six new wells helped to offset the natural decline in production from existing wells and enabled the company to maintain production at a similar level to 2010.
Mr. Ahmed Al-Arbeed, Chief Executive Officer, said: “Dana Gas continues to pursue opportunities to expand and build its business. The Company’s operational progress during 2011 has continued its remarkable track record, which both reflects the high quality of our hydrocarbon assets as well as being a testament to the skills and commitment of our professional staff who continue to deliver first class results across our business units. Dana Gas has established itself as an important regional oil & gas exploration and production company. We have continued to grow our production and profits every year since we first started and we will continue to pursue our ambitious long-term growth strategy to deliver value to all of our stakeholders.”
In the Kurdistan Region of Iraq, Dana Gas continues to deliver gas to the two major regional power stations, and with the completion and start-up of two new LPG processing trains, the Company’s facilities are now fully operational. During the course of the year, the Company also collected a part payment for the receivables owed to the Company by the Kurdistan Regional Government (KRG).
Also in Egypt, Dana Gas is making good progress with the development of the new Natural Gas Liquids plant in Ras Shukheir in which the Company owns a 26.4% interest in partnership with EGAS and APICORP. The construction of the facilities is advancing well with start up scheduled for Q2 2012. The extracted propane will be sold to international private-sector clients for export, and the butane to the Egyptian Government, thus creating an important new revenue stream for Dana Gas. The plant is designed to extract up to 110,000 tons per annum of propane and 20,000 tons per annum of butane from a gas stream of 150 mmscfd. The initial throughput of gas is expected to start at 90 mmscfd.
Dana Gas’s UAE Gas Project continues to await the delivery of gas from the National Iranian Oil Company (“NIOC”). Dana Gas’s joint-venture partner in the UAE Gas Project, Crescent Petroleum, continues to seek a legal ruling on the gas deliveries and expects a decision from the arbitration tribunal in this regard during 2012.
Mr. Al-Arbeed concluded: “We look forward to strong performance in 2012, during which our prime focus will remain on growing our cash flows and maximising shareholder value. We plan to steadily build our asset base, albeit prudently managing our financial resources in light of regional and global circumstances”.
Mr. Ahmed Al-Arbeed, the company CEO, also shared with the Board of Directors of the Company his intention to retire full-time executive responsibilities in September of this year, after leading the Dana Gas management for the past 3 years. The Board thanked Mr. Al-Arbeed for his years of dedicated service which have seen the company grow into a recognized player on the region’s gas industry. A Board Committee was formed to oversee the search for qualified candidates to replace Mr. Al-Arbeed as CEO ensuring a smooth handover to his successor. Mr. Al-Arbeed expressed his intention to remain as a member of the Board of Directors, as he has been since the company’s establishment in 2005.
Sharjah
Jan 30 2012
Dana Gas: Preliminary Results for the year to 31 December 2011
Year to 31 December 2011 (AED M)
Gross revenue – 259
Gross profit – 1,335
Net profit – 556
Year to 31 December 2010 (AED M)
Gross revenue – 1,785
Gross profit – 781
Net profit – 158
Increase %
Gross revenue – 42
Gross profit – 71
Net profit – 220
Dana Gas PJSC the Middle East’s largest regional private sector natural gas company, has announced its preliminary financial results for the year ended 31st December 2011.
Financials
Dana Gas reported gross revenue of AED 2.5 billion (2010: AED 1.8 billion), from the sale of hydrocarbons, and gross profit for the year of AED 1.3 billion (2010: AED 781 million), representing increases of 42% and 71% respectively.
Net profit was AED 506 million (2010: AED 158 million), a 220% rise, reflecting growing production, higher realised oil prices, and optimized cost management in 2011.
Earnings before interest, tax, depreciation, amortisation and exploration (EBITDAX) were AED 1.6 billion (2010: AED 1 billion), a year-on-year increase of 54%.
The above Income Statement excludes an unrealised loss of AED 326 million on Dana Gas’s 3% shareholding in MOL, the Hungarian-listed Oil and Gas Company and a key partner in Dana Gas’s Kurdistan operations. MOL’s share price declined by 16% and the HUF/US$ exchange rate declined by 12% in 2011. This loss is booked directly to equity in line with the Company’s published accounting policy, resulting in Total Comprehensive Income for 2011 of AED 180 million.
Net cash generated from operations was AED 357 million. In 2011 the Group collected AED 649 million from its share of receivables in Egypt and Kurdistan Region of Iraq.
Commenting on the results, Hamid Jafar, Chairman of Dana Gas, said: “For Dana Gas, 2011 was a year of successful operational growth against a backdrop of unprecedented regional political turmoil. The consequences of the so-called ‘Arab Spring’ are presenting the oil and gas industry with considerable challenges in the short term, and Dana Gas is not immune to these. However, we enjoy amicable and cooperative relationships with our host governments in the UAE, Egypt and the Kurdistan Region of Iraq. We are confident of developing and maintaining our host governments’ essential gas supplies, and as applicable agreeing plans for payment of outstanding sums due to us.”
Ahmed Al-Arbeed, Chief Executive Officer of Dana Gas, added: “We are proud of the Company’s strong operational performance in 2011, particularly given the challenging environment. We have successfully continued to grow our reserves and production, and are now very focussed on receivables collections while preserving our assets for benefit of all stakeholders.”
Production and Development
The Group’s Net Production averaged 66,200 barrels of oil equivalent per day (boepd) from its interests in Egypt and the Kurdistan Region of Iraq for 2011. This represents a year-on-year increase of 19%.
During 2011, Dana Gas Egypt produced gas, LPG, condensate and crude oil at an average rate of just over 42,500 boepd. This is similar to 2010 production, despite natural decline of production from existing fields and a slower pace of drilling of new production wells in order to calibrate capital expenditure with collections.
In the Kurdistan Region of Iraq, the Company continued to increase its production, achieving an average rate of 23,700 boepd (2010:13,200 boepd). The first LPG plant train was commissioned in January 2011, and the second LPG train in April 2011.
Exploration & Appraisal
In 2011, the Group conducted a multi-well exploration and appraisal programme drilling 6 wells, with a 50% success rate. All of the wells were drilled in the Nile Delta concessions, with South Abu El Naga-2, Iris-1 and South Faraskur-3 adding new resources.
Reserves
The Company’s Egypt and Sharjah Western Offshore Gross Proved Reserves (1P) remained flat for 2011, estimated at 88 million barrels of oil equivalent (mmboe) (2010: 89 mmboe).
In 2011, the Gross Proved plus Probable Commercial Reserves (2P) increased to 159 mmboe (2010: 152 mmboe). These 2P reserves give a total reserves addition of 5% (after 2011 production in Egypt) and 15% (before 2011 production in Egypt). This represents a production replacement ratio of 145% for the year.
The Company’s hydrocarbon reserves are evaluated independently by petroleum consultants, Gaffney Cline and Associates.
Liquidity and Financial Resources
Group cash balance at 31 December 2011 stood at AED 411 million.
Sharjah
Jan 17 2012
With respect to recent commentary and speculation regarding the Company’s convertible sukuk and volatility in its share price, Dana Gas PJSC wishes to make the following statement.
Dana Gas has grown to become the Middle East’s largest regional private sector natural gas company. In 2011, the Company continued to demonstrate robust operational performance, maintain strong financial discipline, and pursue significant growth initiatives.
In the 9 months to 30 September 2011, revenues were $515 million, a significant increase on the $487 million which was achieved in the whole of 2010. Our average production in 2011 grew to over 66,200 barrels of oil equivalent per day. This is an increase of 19% compared with the 55,500 barrels of oil equivalent per day we produced in 2010. Moreover, Dana Gas has successfully increased its proved and probable reserves to 152 million barrels of oil equivalent at the end of 2010.
With reference to its Convertible Sukuk which are not due until 31 October 2012, the Company has been proactive in taking the initiative to mandate advisors including an international financial advisor and will update the market with its plans in good time and due course. Dana Gas over the last four years has timely and consistently paid on or before the due date the sukuk profit amount and will continue to do so pursuant with its obligations.
Dana Gas maintains strong positive relationships with its host Governments, and is progressing constructive discussions with the Egyptian Government covering the delayed payments due from government owned entities owing to the unrest in that country over the past year. In 2011, a total of $177 million in cash attributable to its share of receivables was collected from Egypt and Kurdistan.
Mr Ahmed Al-Arbeed, CEO Dana Gas, commented: “Dana Gas is successfully delivering on its strategy of growing its oil and gas operations in three major hydrocarbon basins. It is important to view the Sukuk in the wider context of a highly successful company which has already achieved very substantial asset values, together with significant revenue and production growth in its relatively short history, and has great opportunities for further expansion of its portfolio in the medium and long-term.”
Mr Al-Arbeed added: “we look forward to updating the market further when we announce our preliminary financial results on 31 January 2012 together with a detailed operational update.”