Dana Gas posts $24mn H1 net profit, restructures sukuk
Firm’s KRI expansion on track to deliver 25% production increase in Q3.
Sharjah based natural gas company Dana Gas has announced its financial results for the first half of the year, ended June 30th 2018. The firm’s H1 net profit increased year-on-year to $24mn and to $50mn, a 117% increase, when excluding one off sukuk restructuring costs.
The second quarter net profit of $10mn was $2mn lower due to the one off sukuk restructuring costs; however, excluding these, the Q2 net profit was $36mn, a 200% increase year-on-year, demonstrating the improved underlying business performance. The sukuk restructuring has delivered a 50% reduction in sukuk profit rate to 4%, reducing annual debt service costs by an estimated 63%. The saving represents a strong improvement in the company’s financial position and along with increasing operating cash flows provides the basis for the firm’s planned annual dividend policy.
During H1, the company made major strides in delivering its transformational expansion in the Kurdistan Region of Iraq (KRI). The firm is on track with its initial debottlenecking project which is expected to increase production by 25% in Q3 of this year. Moreover, drilling for appraisal and development of the Khor Mor and Chemchemal fields has begun. KRI production is planned to increase by 170% by 2021 through the installation of two 250 million standard cubic feet per day (MMscf/d) gas processing trains, increasing production of gas and condensate by 580 MMscf/d and 20,000 barrels per day respectively. The Kurdistan Regional Government has paid regularly and on time and there are no current outstanding receivables.
Dr Patrick Allman-Ward, CEO of Dana Gas, said:
“We have delivered a strong financial performance with profits up to $24mn and up to $50mn excluding one off sukuk costs, a 117% increase. The reduction in the sukuk profit rate will improve the company’s financial positon and ability to fund future dividends. Operationally, it is an exciting time for the company. This is especially so in the KRI where we are on track with our debottlenecking project, which is expected to increase production by 25% in Q3, and underway with our larger expansion programme, which will deliver a production increase of 170% by 2021.”