Dana Gas will consider a wide range of options, including a potential listing on the London Stock Exchange, before deciding on the approach most likely to enhance the company’s value, its’s chief executive told Gulf News.
Ahmad Al Arbeed also said he hopes other oil and gas companies consider a flotation on the region’s stock markets in the near future — a move he believes would boost investor knowledge of the industry.
Dana reported a first quarter net profit of Dh92 million yesterday, a massive 180 per cent increase on the year-earlier period.
“The value of the company is much greater than what is reflected in the current share price. This is partly because investors do not understand the nature of our business and the fact that very few oil and gas companies are listed on stock exchanges in the Gulf,” Al Arbeed said.
“The local oil industry is dominated by governments, not the private sector. As a result, many people do not understand our investments or the magnitude of their value.”
“If you look at the performance of oil and gas companies on stock exchanges across Europe and the United States, you will see they are valued much higher than in this part of the world.”
“We are studying all options to improve the value of our company to shareholders. A London flotation is one option under consideration but we have to consider all our options before making a disclosure.”
Dana said revenue increased to Dh616 million, with gross profit reaching Dh337 million, mainly from the sale of hydrocarbons and higher market prices for oil, condensate and liquefied petroleum gas.
Along with Crescent Petroleum, the company formed a consortium with Austria’s OMV and Hungary’s MOL in 2009 with the aim of pumping enough gas from Kurdistan to kick-start the Nabucco pipeline to Europe via Turkey. Earlier this month, Dana said it had made its fifth gas discovery in Egypt.
“The increase in oil prices has improved revenues and our overall profits. However, the main factor was the increase in our production, particularly in Egypt and Iraq,” Al Arbeed said.
Dana Gas was the most traded stock on the Abu Dhabi Securities Exchange yesterday. The company’s shares rose 1.47 per cent to a two-week high of Dh0.69 at the close.
“I understand the company has formed a committee to discuss the possibility of a London listing so it is certainly a possibility,” said Kate Dourian, Platts’ Middle East editor.
“It depends on the markets but I think they will move ahead with it [a London listing]. However, they will tread cautiously after their experience with the sukuk,” she added.