Dana Gas PJSC, a United Arab Emirates energy company, posted a third-quarter profit compared with a year-ago loss, attributing the result to higher product prices and output and fewer write-offs due to exploration costs.
Net income rose to 33 million dirhams ($8.99 million) in the quarter from a 79 million-dirham loss in the same period last year, the company said in a statement today. Dana Gas expects to earn a profit for the full year, in line with its results for the first three quarters, Chief Executive Officer Ahmed Al-Arbeed said in an interview.
“We will continue growing,” Al-Arbeed said, adding the company expects to reach its target of boosting production by 20 percent this year. “The quarterly result was due to higher production and lower exploration write-offs.”
Earnings at U.A.E.-based energy companies such as Dana Gas and Abu Dhabi National Energy Co., the state-run utility known as Taqa, have benefited from higher oil prices, which rose to an average of $76.20 a barrel in the quarter from $68.26 a barrel a year earlier. Taqa today said its third-quarter profit more than doubled to 218 million dirhams from 90 million dirhams in the same quarter of 2009.
Dana Gas is developing deposits, production and transportation facilities in Egypt and the Kurdish area of northern Iraq as well as in the U.A.E. The company, based in the emirate of Sharjah, boosted hydrocarbon sales by 13 percent to 407 million dirhams, with production volumes in Egypt and Iraq rising by 24 percent, according to the statement.
Talking with bidders
The company, which pumps most of its natural gas in Egypt, may announce an agreement by the end of this year to sell as much as 30 percent of its Egyptian exploration and production concessions, Al-Arbeed said. Dana Gas is in talks with bidders and is seeking to determine the best offer, he said. Standard Chartered Plc is advising on the transaction.
The company wrote off 15 million dirhams in the quarter due to unsuccessful exploration, compared with a similar impairment of 110 million dirhams in the same quarter of last year, according to the statement. Dana Gas has reported profit of 33 million dirhams in each quarter of the year so far, resulting in a nine-month profit that already exceeds the 88 million dirhams it earned for all of 2009, according to Bloomberg data.
Dana Gas announced discoveries at two wells in Egypt, where it produced the equivalent of 3.9 million barrels of oil a day in the third quarter. The production rate at the Khor Mor field in the semi-autonomous Kurdish region in northern Iraq is set to rise to 300 million cubic feet a day next year from the current daily rate of 200 million cubic feet, Al-Arbeed said.
The West Ward Delta 1 discovery in Egypt tested at a rate of 12.9 million cubic feet a day, and preliminary estimates put potentially recoverable reserves there at between 10 billion and 17 billion cubic feet of gas. The Salma Delta North 1 well tested at 16.1 million cubic feet a day, with 561 barrels a day of condensate, the company said. More testing is needed to determine potential reserves, the company said.
(Source: Bloomberg businessweek)