(MENAFN- Khaleej Times)Dana Gas on Thursday reported an 85 per cent slump for the second quarter net profit due to oil price drop and lower production.
The Sharjah-based company made a net profit of Dh25 million ($6.8 million) for the three months to June 30 compared to Dh169 million during the same period last year. The second quarter's net profit was worse than a 73 per cent year-on-year decline in the first-quarter profit although it stayed in the black in the second quarter. The company had swung into the red in the final quarter of 2014 Reuters data shows. The company's second-quarter revenue was Dh425 million down from Dh685 million a year earlier. Dana Gas attributed the drop to a sharp decline in hydrocarbon prices compared to the previous 12 months. Oil prices have fallen more than half from a June 2014 peak. "Despite the steep fall in global oil prices over the past year and events in the region Dana Gas has remained profitable and strengthened its operations with new investments" said Dr. Patrick-Allman Ward CEO of Dana Gas. The company is looking forward to additional production and cash generation in the second half of the year from its new investment programme in Egypt which is now under way as well as from Zora field in the UAE coming on-stream. "With our continued cost discipline and this expected increase in production Dana Gas is well positioned to benefit from any improvements in the oil price in the future" he added. The company said in the statement it would increase production in Egypt and the UAE in the second half of 2015 predicting this would help increase its revenues. The company's total assets grew to $3.729 billion. Operationally Dana Gas commenced drilling work on the Balsam-2 development well and Balsam-3 appraisal well in Egypt which represent the first operations of a major drilling and work-over campaign as part of the Gas Production Enhancement Agreement (GPEA) work commitment. The company has also completed a Participation Agreement with BP for drilling one exploration well in El Matariya Onshore Concession (Block 3). In the UAE work on the Zora Gas field project is progressing with the first gas expected to come on-stream in the second half of 2015. Together these factors are expected to translate into increased production for Dana Gas over the coming period. Dana Gas maintained steady cash-flows from Egypt and Kurdistan operations and also received an important ruling on the last day of the quarter from the international arbitration with the Kurdistan Regional Government (KRG) of Iraq which confirmed the Consortium's exclusive long-term rights to develop and produce gas and petroleum from both the Khor Mor and Chemchemal fields for the duration of the Contract being not less than 25 years as well as the KRG's contractual obligation to pay the Consortium for the produced condensate and LPG at international prices including the pricing methodology for each. -
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