Dana Gas reports 53% rise in 2022 adjusted net profit on higher oil prices

The outlook for 2023 is encouraging, says chief executive Patrick Allman-Ward

The Khor Mor gas complex, operated by Crescent and Dana Gas, in the Kurdistan Region of Iraq. Photo: Crescent Petroleum

Dana Gas, one of the largest private natural gas companies in the Middle East, reported a 53 per cent annual rise in adjusted net profit in 2022 on higher oil prices and production in the Kurdistan Region of Iraq.

The company's adjusted net profit, which excludes the impact of non-recurring items, rose to Dh718 million ($196 million) from Dh469 million a year ago, the Sharjah-based company said on Wednesday in a filing to the Abu Dhabi Securities Exchange, where its shares are traded.

Revenue for the year ended December increased 17 per cent to Dh1.94 billion, while operational costs decreased by 5 per cent to Dh209 million last year.

Total assets rose 1.6 per cent to Dh9.78 billion, while net profit declined to Dh667 million last year, compared with Dh1.16 billion in the previous year.

“Our strong results for the year are a testament to our ability to control costs and maintain production levels amid a prolonged environment of high energy prices,” said Patrick Allman-Ward, chief executive of Dana Gas.

“The outlook for this year remains encouraging, especially if oil prices remain at current levels. However, there remains various challenges, specifically with collections in the KRI and foreign currency withdrawals in Egypt.”

Oil and gas producers have benefitted from a surge in crude prices since Russia’s military offensive in Ukraine began in February last year.

Brent, the benchmark for two thirds of the world’s oil, is currently trading at roughly $84 a barrel after touching a high of nearly $140 a barrel in 2022.

Production in the KRI and Egypt “remained uninterrupted” throughout 2022, Dana Gas said.

While production in the KRI increased by 1 per cent to 34,300 barrels of oil equivalent per day (boepd), output fell by 8 per cent in Egypt to 25,900 boepd, due to natural field declines.

Average production volumes for the year declined 3 per cent annually to 60,200 boepd.

The “macroeconomic” situation in Egypt has resulted in restrictions in US dollar repatriation, said Dana Gas.

“As a result, investment will remain in line with collections and foreign currency availability,” it said. "The company will be taking appropriate measures to ensure recovery of all delayed payments as soon as possible.

Egypt's currency has depreciated by nearly 50 per cent over the past year, with the pound trading at 33 to the dollar on Wednesday.

Dana Gas said it reached an agreement with Egypt’s state gas board EGAS to consolidate its existing concessions on “enhanced fiscal terms".

The agreement, subject to further government approval, will extend the life of Dana Gas’ economic assets, the company said.

Dana Gas has operated in Egypt through its subsidiary Dana Gas Egypt since 2007 and is focused on producing natural gas and gas liquids, including condensate and liquefied petroleum gas.

“Our operational performance, in which all our assets continued to produce uninterrupted throughout the year, even under testing economic circumstances and security challenges, exemplifies our ability to keep delivering on our commitments,” said Mr Allman-Ward.

Last month, Dana Gas approved a proposal to raise the foreign ownership of its shares to 100 per cent.

In April last year, the company was included in the Abu Dhabi Securities Exchange’s FTSE ADX 15 Index, which includes the 15 largest and most liquid companies on the ADX, chosen on the basis of free-float adjusted market capitalisation and median trading value.