Dana Gas profits up 18% in Q3

The Sharjah oil and gas company has posted higher third-quarter net profit, due to increased gas production.

Dana Gas has posted higher third-quarter net profit, due to increased gas production. The Sharjah oil and gas company reported Dh26 million (US$7.07m) of net income for the three months ended Sept 30, up 18 per cent from Dh22m a year earlier. Revenues increased 16 per cent to Dh320m from Dh276m. "The current period of growth has been of great significance to Dana Gas, with production start-up from its Kurdistan gas project combined with an important discovery in Egypt," said Hamid Jafar, the company's executive chairman.

Dana's combined gas production from Egypt and the Kurdistan region of Iraq had reached 220 million cubic feet per day (cfd), he said. This was expected to continue to increase as the company and its partner, Crescent Petroleum, installed additional gas-processing facilities that would enable them to double output from the Kurdistan project to 150m cfd "early next year" and quadruple it to 300m cfd by the end of next year.

"Work is also progressing in Egypt to obtain government approvals to bring our new gas discovery in Egypt, al Tawil, on stream in early 2009," Mr Jafar said. In the UAE, Dana was moving ahead with plans for gas exploration and development off Sharjah, and would develop the Zora offshore gasfield by the middle of next year, he said. The Kurdistan project is especially significant to Dana because it is the first the company has successfully developed from scratch. Gas deliveries from northern Iraq's Khor Mor field to a newly built power station near the regional capital of Erbil began on Oct 1, after the company completed a 180km pipeline in late September.

Dana acquired its first producing assets in January last year, when it took over Centurion Energy, a Canadian oil and gas company operating in Egypt. By the end of last year, Dana was pumping about 32,000 barrels of oil equivalent a day (boed) from those assets, of which nearly 27,000 boed was gas. With new discoveries, Dana has increased its Egyptian gas production to about 33,000 boed. It said its total oil and gas production from Egypt generated more revenue than a year ago, mainly due to improved recovery of especially valuable liquid petroleum gas and condensates from the gas stream.

The one area in which Dana has shown little progress this year is in its project with its major shareholder, Sharjah-based Crescent, to import Iranian gas to the UAE. As it reported at its annual meeting in April, Dana reiterated yesterday that the National Iranian Oil Company had completed the installation of "all the main components of the required upstream facilities" and was in the final stages of commissioning them.

Dana and Crescent finished building an undersea pipeline and other facilities for the Iranian gas in 2005. [e-mail]