The UAE’s Dana Gas share declined during trading today, Wednesday, May 10 (2023), in the Abu Dhabi market, after its profits fell in the first quarter.
The results of Dana Gas’s business in the first quarter of 2023 revealed a decline in net income by 8%, to reach 183 million dirhams ($50 million), compared to profits of 198 million dirhams ($53.92 million) during the first quarter of 2022.
By 08:30 a.m. GMT (11:30 a.m. Mecca Al-Mukarramah time), Dana Gas’s stock fell in the Abu Dhabi market by 0.48%, recording 0.83 dirhams ($ 0.23).
Dana Gas business results in the first quarter of 2023
The decline in product selling prices by 22% affected Dana Gas’s revenues during the first quarter of 2023, according to data seen by the specialized energy platform.
The company, listed on the Abu Dhabi Stock Exchange, said that the increase in production in the Kurdistan region of Iraq during the period contributed significantly to limiting the decline in profits.
The company’s revenues decreased during the first quarter of this year by 13%, compared to the corresponding period of last year, to reach 447 million dirhams ($121.73 million), which the company attributed to the drop in oil prices from their high levels.
It is noteworthy that the Kurdistan region’s oil exports via Turkey have been suspended since the end of last March, as the conflict between Baghdad and the semi-autonomous Kurdistan Regional Government stopped shipments from the port of Ceyhan on the Mediterranean.
Dana Gas production
The average production of Dana Gas in the first quarter of 2023 reached 62.9 thousand barrels of oil equivalent per day, an increase of 1% compared to 62.4 thousand barrels of oil equivalent per day during the first quarter of 2022.
The production rate in the Kurdistan Region of Iraq increased by 9%, to reach 38.7 thousand barrels of oil equivalent per day, compared to 35.4 thousand barrels of oil equivalent per day in the first quarter of 2022.
This came after increasing production capacity during the last quarter of 2022, following the successful completion of the bottleneck removal project at Khor Mor station.
The production capacity of the Khor Mor gas plant reached a record level of 500 million cubic feet per day in January.
Increasing the company’s production in the Kurdistan region of Iraq and reducing operating costs by 14% had a positive impact in limiting the drop in oil prices.
On the other hand, the production rate in Egypt decreased by 10%, to reach 24.2 thousand barrels of oil equivalent per day in the first quarter of 2023, compared to 27 thousand barrels of oil equivalent per day during the first quarter of 2022, due to the natural decline in field production.
The company completed drilling 5 wells in the “Khormor 250” gas production expansion project, and the first two wells were tested and showed that they are capable of producing gas at daily rates similar to the currently operating wells, and the other three wells will be tested soon.
The company is moving forward with working on the project, and starting gas production, by the second quarter of 2024.
Dana Gas dividends
Dana Gas’s business results in the first quarter of 2023 announced the distribution of cash dividends of 4.5 fils per share for the second half of 2022, which will be paid to shareholders on May 25.
The company said in a statement seen by the energy platform: “The approval raises the total cash dividends for the year 2022 to 630 million dirhams ($ 171.56 million), or the equivalent of 9 fils per share, which constitutes an increase of 12.5% on an annual basis, compared to the dividends for the year 2022.” 2021″.
Finance costs increased by 75%, to reach 7 million dirhams ($1.91 million) in the first quarter of 2023, compared to 4 million dirhams ($1.09 million) during the first quarter of 2022.
Dana Gas net profit declined to 667 million dirhams ($181.64 million) at the end of 2022, compared to a net profit of 1.16 billion dirhams ($320 million) at the end of 2021.
On the other hand, the average selling prices achieved during the first quarter of 2023 amounted to $59 per barrel of condensate and $39 per barrel of oil equivalent of liquefied petroleum gas, compared to $82 and $43, respectively, during the first quarter of 2022.
Dana Gas plans
Dana Gas Chief Executive Officer Patrick Allman-Ward said: “Dana Gas delivered a set of strong financial and operational results, despite the decline in energy prices.. We continue to adhere to our disciplined financial approach, as well as our focus on maintaining production levels and reducing costs, despite the challenges The economic situation in Egypt and the Kurdistan region of Iraq.
He added that the target date for completing the Khor Mor 250 project and starting gas production is April 2024, and “we hope that the agreement to merge the concessions in Egypt will be completed soon.”
He pointed out that in the next phase, the company intends to focus its efforts on managing capital expenditures and maintaining stable liquidity levels, while moving forward with collecting late payments from both the Kurdistan Regional Government of Iraq and the Egyptian government.
Dana’s business results in the first quarter of 2023 showed that the company’s cash liquidity levels stabilized on March 31, 2023 at 542 million dirhams ($148 million), including an amount of 374 million dirhams ($102 million) held with Pearl Petroleum.
To enhance liquidity levels, during the first quarter, the company obtained a short-term credit facility of $65 million from a local bank in the UAE, and the full amount was withdrawn in April 2023.
The company collected a total of 231 million dirhams ($63 million) during the first quarter of 2023, as payments received amounted to 55 million dirhams ($15 million) in Egypt, and 176 million dirhams ($48 million) in the Kurdistan region of Iraq.
At the end of the first quarter, the balance of receivables amounted to 293 million dirhams ($80 million) in the Kurdistan region of Iraq, and 128 million dirhams ($35 million) in Egypt.
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