Emirates: Dana Gas on Wednedsday announced that it generated a net profit of Dh183 million ($50 million) for the first quarter of 2023 as compared to Dh198 million ($54 million) in Q1 2022. Profitability for the quarter dropped 7 per cent compared to a 22 per cent decrease in the company’s realised prices during the period.

The impact of lower realised prices on the company’s profitability was partially offset by a production increase in the Kurdistan Region of Iraq (KRI) and reduced operating costs by 14 per cent.

Revenue was 13 per cent lower at Dh447 million ($122 million) in Q1 2023 compared to Dh513 million ($140 million) in 2022. The decrease in revenue, and subsequently net profit, was primarily due to a pullback in energy prices from high levels.

The company’s realised prices during the period averaged $59 per barrel for condensate and $39 per barrel of oil equivalent (boe) for LPG compared to $82 per barrel and $43 boe respectively in Q1 2022.

Dana Gas’s shareholders in April approved the board’s recommendation for a final dividend payment of 4.5 fils per share for H2 2022. The payout of 4.5 fils per share for the second half of 2022, to be distributed on May 25, will take the total dividend payment for 2022 to Dh630 million or 9 fils per share, a 12.5 per cent increase compared to the dividend for 2021.

Dr Patrick Allman-Ward, CEO of Dana Gas, commented: “Dana Gas has delivered a strong set of financial and operating results despite the downturn in energy prices. We remain financially disciplined and focused on maintaining production and lowering costs, despite the challenging economic situation in the KRI and Egypt. Our target date for completion of the KM250 gas expansion project is April 2024, and we are hopeful our Egypt consolidation agreement will be finalized soon Looking ahead we are focusing our efforts on managing capital expenditure and preserving liquidity, as we continue to focus on recovering our outstanding receivable payments with both the KRG and Egyptian Government”.

Operations and production

Group production in Q1 2023 averaged 62,900 barrels of oil equivalent per day (boepd), a 1 per cent increase as compared to 62,400 boepd in Q1 2022. KRI production grew by 9 per cent to 38,700 boepd from 35,400 in Q1 2022, building on the production capacity increase in Q4 2022 after the Khor Mor plant de-bottlenecking enhancements were completed. Production in Egypt declined 10 per cent to 24,200 boepd in Q1 2023 from 27,000 in Q1 due to natural field declines.

The company has now completed the drilling of five KM250 project wells, and the testing of two wells has shown they are able to produce gas at similar daily rates as the current producing wells. The three other wells will be tested in the near term, as the company pushes forward on delivering first gas from the project by Q2 2024.