Dana Gas ends 2017 financially stronger with US$83mn net profit

Dana GasThe company announces plans to increase production in KRI underway. (Image source: Jose Angel Astor/Flickr)Dana Gas PJSC, the Middle East’s largest regional natural gas company, has reported gross revenue and net profit of US$450mn and US$83mn for 2017, as compared to US$392mn and net loss of US$88mn in 2016

The company has announced this in its audited financial results for the full year ended 31 December 2017.

The turnaround was led by higher realised liquid prices, higher production in Egypt and tight management of operational expenses. Higher profit was also supported by the successful settlement agreement with the Kurdistan Regional Government. However, Q4 2017 net profit was impacted by an impairment charge of US$34mn against the UAE Zora asset following the year-end reserve report.

The 2017 group average production increased to 67,600 boepd, up one per cent from 67,050 boepd in 2016. Egypt’s annual production was five per cent higher at 39,500 boepd. KRI production was flat at 25,750 boepd vis-à-vis 2016 and the UAE’s Zora Gas field produced 1,650 boepd in 2017 as compared to 2,700 boepd in 2016.

The average realised liquid price was US$40 per boe, compared to US$33 boe in 2016, a 21 per cent increase in 2017. The group average production in Q4 2017 was lower at 67,350 boepd, compared to 69,450 boepd in 2016.

The year-end cash balance stood at US$608mn, double the US$302mn reported at the end of 2016. The Company kept costs and expenses to a minimum which resulted in a G&A spend of US$15mn and operational expenses of US$52mn, totalling US$67mn.

The Company retains Gaffney Cline & Associates (GCA) to independently evaluate and certify the hydrocarbon reserves at year-end. GCA evaluated KRI’s reserves at year-end 2015 at 990 mmboe and the fields remain some of the largest undeveloped resources in the Middle East.

Following the 2017 review, Egypt’s proved and probable reserves were assessed at 117 mmboe as compared to 132 mmboe.

Dr Patrick Allman-Ward, CEO of Dana Gas, said, “Our settlement agreement with the Kurdistan Regional Government was a major milestone for the company. This has allowed us to start to fully develop the Khor Mor and Chemchemal fields, two truly world-class gas fields, with in-place volumes of approximately 75 trillion cu/f of wet gas and seven bbl of oil, to the benefit of the people of the Kurdistan Region and all of Iraq.”

“We continued to focus on cost efficiencies and managed to maintain our low levels of G&A, capex and operational expenditures in support of our capital conservation objective, and this focus will carry-on in 2018,” he added.

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