The Middle East’s largest private sector natural gas company Dana Gas PJSC on Sunday announced its 2021 first quarter net profit increased 41 percent compared to last year, totaling AED88 million ($24m), attributed to higher production in Iraq’s Kurdistan and a reduction in finance cost due to lower borrowings in quarter one 2021 as compared to quarter one 2020.
In April, the UAE-based company Dana Gas said it would resume construction of expansion works at the Khor Mor gas field in Kurdistan. Dana Gas partners with Crescent Petroleum on the expansion project and they jointly operate the project on behalf of the Pearl Petroleum consortium.
The project construction work had been put on hold due to the Covid-19 pandemic but is now on track for a new target start date of April 2023, after agreement to lift the force majeure with both the Kurdistan Regional Government (KRG) and the contractor. The Kurdistan KM250 expansion project involves a further investment by Pearl Petroleum of $600m to boost output by almost 60 percent.
“In Kurdistan we are moving ahead with our expansion plans to significantly boost production from 440 million standard cubic feet per day (MMscf/d) to 690 MMscf/d by April 2023. This will contribute positively to our top and bottom line,” said Dr Patrick Allman-Ward, CEO of Dana Gas in a statement.
In 2020 at the height of the pandemic, Dana Gas reported AED113m ($31m) in net profits before one-off non-cash impairments for the first nine months, but this was down from $69m in the first nine months of 2019.
Production in Egypt declined by 5 percent to 29,050 barrels of oil equivalent per day (boepd), which was more than offset by the increase in production in Kurdistan. The company collected AED84m ($23m) from Egypt during the first quarter and AED128m ($35m) from Kurdistan.
In April, Dana Gas’s $236m deal to sell oil and gas blocks in Egypt to Texan company IPR Energy Group fell through. As a result, the UAE-based company kept the assets, which accounted for output equivalent to 31,000 barrels a day of oil in 2019.
Dana Gas had said the sale would help it pay back a $309m sukuk. While the Islamic bond was redeemed at the end of November, the firm took on a $90m bridge loan from Dubai’s Mashreq Bank.
“We remain fully committed to managing our producing assets in Egypt for the benefit of all our stakeholders and focusing on evaluating the exciting potential of our offshore Block 6 Concession Area as quickly as possible,” Allman-Ward said.
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