Dana Gas profit fell in 2023 on lower oil and gas prices

Sharjah-based company's revenue fell to $422 million last year, compared with $528 million in 2022

The Khor Mor Gas plant is operated by Crescent Petroleum and Dana Gas. Photo: Crescent Petroleum

Dana Gas, one of the largest private natural gas companies in the Middle East, has reported a 12.1 per cent annual drop in its profit for 2023 on lower oil and gas prices.

The Sharjah-based company’s net profit for the 12 months ending in December declined to Dh586 million ($159.5 million), it said on Thursday in a filing to the Abu Dhabi Securities Exchange, where its shares are traded.

Net revenue for the period fell to Dh1.55 billion ($422 million) last year, compared with Dh1.94 billion ($528 million) in 2022.

“2023 was an operationally strong year for Dana Gas, but not without its challenges,” said Richard Hall, chief executive of Dana Gas.

However, the company achieved “record” natural gas production from its operations in the Kurdistan Region of Iraq, which underscores Dana Gas’ ability to optimise resources, Mr Hall said.

Dana Gas said it was not in a position to recommend a dividend at an upcoming shareholder’s meeting as Pearl Petroleum, an affiliate, did not pay dividends to its stakeholders last year.

Dana Gas and Crescent Petroleum have a 35 per cent stake each in the company, which has operations in the KRI region.

“The company does expect to make the associated dividend distributions in the future as sufficient cash is received,” Dana Gas said.

“Dana Gas remains committed to its declared dividend policy, and to reinstating dividend payments as soon as the company’s cash receipts permit,” the company added.

In November, Dana Gas had said that it would consider an annual dividend payment in March 2024 after suspending its interim dividend for the first half of 2023.

The decision was driven by the company’s continued challenge of delayed collections in the Iraqi Kurdish region and Egypt, where combined receivables stood at $151 million as of December 31, 2023.

Dana Gas, which plans to invest $100 million to drill new wells in Egypt, said it expected the country's parliament to ratify a consolidated concession agreement in the first quarter of this year, which would extend the operational lifespan of the company's assets in the country and support production levels.

The company's production in 2023 declined slightly to 58,700 barrels of oil equivalent per day (boepd) from 60,200 boepd in 2022.

Dana Gas attributed the drop in output to natural field declines in Egypt, which resulted in production from the country dropping by 16 per cent last year.

That was partially offset by an 8 per cent increase in production in the KRI to 36,900 boepd, the company said.

Oil and gas companies reported record profits in 2022 after Russia's invasion of Ukraine pushed crude prices to nearly $140 a barrel.

Last year, oil prices recorded their biggest annual drop since 2020 amid persistent concerns about lower demand and a slowing global economy.

Brent, the global benchmark for two thirds of the world's oil, was trading 0.49 per cent higher at $79.60 a barrel at 11am UAE time on Thursday.

Dana Gas said its realised prices last year averaged $51 a barrel for condensate and $35 per barrel of oil equivalent (boe) for liquefied petroleum gas, compared with $79 a barrel and $42 per boe, respectively, in 2022.