Earnings before interest, tax, depreciation, amortization and exploration (EBITDAX) increased by 63% to AED 411 million as compared to the second quarter of last year.
Results for 6 Months ended 30th June 2011
The Net Profit for the 6 months ended 30 June 2011 was AED 216 million compared to AED 66 million in the same period last year. The above Net Profit for the six months excludes an unrealized gain of AED 172 million on the Company’s investment in MOL (the Hungarian oil and gas company, one of our partners in the Kurdistan Region of Iraq), booked directly to equity in line with the Company’s published accounting policy. EBITDAX for the six month period increased to AED 814 million compared to AED 480 million in the same period last year.
Dana Gas Egypt’s operations have continued to deliver strong results producing 4.0 million barrels of oil equivalent during the second quarter, an increase of 6% compared to the same period last year. During the period Dana Gas announced a new discovery at South Abu El Naga-2 in the West El Manzala Concession, which increased the estimated reserves by more than 60 billion cubic feet of gas. Importantly, this new pool will begin contributing to production by the end of 2011.The Company has continued work to optimize the development of the South Abu el Naga discovery and its discoveries in the Salma and Tulip area of its Nile Delta Concessions and now plans to expand the existing El Wastani gas processing plant, a more cost effective solution than building the previously proposed new plant at the Salma field. The new facilities will also increase recovery of LPG for the entire gas stream passing through the El Wastani Plant.
In the Kurdistan Region of Iraq, Dana Gas, net to its 40% share, produced 1.84 million barrels of oil equivalent of gas, condensate and LPG during the period, an increase of 73% over the same period in 2010. Both trains of the LPG Plant at Khor Mor are now complete and in operational mode. Gas production from Khor Mor is increasing, and is now exceeding 300 million standard cubic feet of gas per day, as demand from the power stations increases and as new customers in the region are established.
In our Sharjah Western Offshore Concession an independent assessment of the reserves of the Zora field is close to completion. An invitation to tender for the fabrication and installation of the offshore platform has been issued and once all the contractual arrangements are completed the project construction phase will commence. The total development cost of this field is estimated to be AED 450-550 million ($125-150 million).
As stated recently Dana Gas continues discussions with the appropriate authorities to expedite payments of its overdue receivables in Egypt, and likewise in the Kurdistan Region of Iraq. Collection of receivables improved during the second quarter of 2011 compared to the first quarter. Dana Gas collected approximately AED 210 million ($57 million) in revenues during the second quarter, AED 130 million ($35 million) from Egypt and AED 80 million ($22 million) from the Kurdistan Region of Iraq. The Company seeks to manage its capital expenditure in line with cash generation and is maintaining tight control of its costs, with total capital expenditure for the second quarter of 2011 being AED 106 million ($29 million), a 31% reduction compared to the same period in 2010. Dana Gas’ cash position remains strong with a balance at 30 June 2011 of AED 400 million ($109 million).
Dana Gas’ $1 billion Sukuk is maturing in October 2012 and the Company is working to implement a Sukuk Liability Management Programme with regard to this bond. Dana Gas continues to assess various options for its optimum capital structure and will update the market when appropriate.
The Company still holds its 3% interest in MOL, the Hungarian Oil and Gas Company, the value of this holding remains significantly higher than when it was first acquired in May 2009.
Commenting on the performance, Dana Gas Chief Executive Officer, Mr. Ahmed Al Arbeed, said: “I am very pleased to report that Dana Gas’ Net Profits are up by an impressive 276% compared to the second quarter of 2010. This excellent outcome is driven by the 20% increase in production from Egypt and the Kurdistan Region of Iraq and consequent increase in revenues accompanied by our tight control of costs throughout the organization.”
“Whilst Dana Gas continues to deliver consistent strong operational and financial results, we are working diligently to meet the challenges that we face during the political changes in our region and at the same time we seek to take advantage of opportunities as they arise.” said Mr. Al Arbeed.
Note: For logistical reasons Dana Gas will not be hosting a conference call for these 2nd quarter results, however written questions are invited which should be sent to dg.investorrelations@Danagas.ae. The financial statements and further statistical information is available on the Dana Gas website: www.danagas.com
Dana Gas press release