Dana Gas profit falls in third quarter on lower crude prices

The company will not pay an interim dividend for the first half of 2023

Gas is flared at the Bai Hassan oilfield near Kirkuk. Dana Gas says delayed collections in the Iraqi Kurdish region continue to be a challenge. AFP

Dana Gas, one of the largest private natural gas companies in the Middle East, has reported a 14 per cent drop in third-quarter net profit on lower crude oil prices.

Net profit attributable to equity holders of the parent company for the three months to the end of September declined to $43 million, from $50 million in the same period a year earlier, the company said on Wednesday in a filing to the Abu Dhabi Securities Exchange, where its shares are traded.

Net revenue for the period fell by about 14 per cent annually to $83 million.

“Our proactive measures implemented over the past few years, such as cost reductions and production optimisation, have yielded clear operational and financial benefits,” said Richard Hall, the newly appointed chief executive of Dana Gas.

Brent, the benchmark for two thirds of the world’s oil, surged to about $140 a barrel after the invasion of Ukraine last year, but has since given up most of its gains due to resilient Russian crude supply and fuel demand concerns.

However, the international benchmark rose by more than 22 per cent in the third quarter as Opec+ production cuts, combined with voluntary output reductions by Saudi Arabia and Russia, tightened crude supplies.

Dana Gas said it would not pay an interim dividend for the first half of 2023 and will consider an annual dividend payment in March 2024 based on conditions at that time.

The decision was driven by the company’s continued challenge of delayed collections in the Iraqi Kurdish region and Egypt, where combined receivables rose to $153 million, as well as capital expenditure requirements for the Khor Mor gas expansion project in Iraq.

“Dana Gas will also continue to work closely with our government partners in Egypt and the KRI [Kurdish region in Iraq] to ensure timely settlement of all outstanding receivables,” Mr Hall said.

The company's production in the third quarter stood at 59,600 barrels of oil equivalent per day (boepd), slightly down from 59,800 boepd in the same period last year.

A drop in production from the company’s assets in Egypt was partially offset by a rise in output in Kurdistan, Dana Gas said.

The company’s net profit in the first nine months of 2023 fell by about 22 per cent to $126 million while net revenue was down about 18 per cent in the same period.

Production in the first nine months of 2023 dipped 1 per cent from same period a year ago to 59,750 boepd.