UAE-based Dana Gas announced a $7.6m loss in the third quarter of 2015. The company operates mostly in Egypt and Iraq. In the same period last year, the company recorded a profit of $37.7m, reported Bloomberg.
The company blamed low oil prices, which have fallen by more than 40% this year for the losses: “The business environment has been difficult for the whole of the petroleum sector over the course of this year and it appears that it will continue to remain difficult during 2016… We need to prepare ourselves for the continued low oil price environment going forward,” said CEO Patrick Allman-Ward.
Ahram reports that, according to a company statement, the firm has cut costs by $5m since the beginning of the year by dramatically lowering general and administrative expenses and reducing the workforce in the fourth quarter of the year.
The firm’s production in Egypt fell by 21% compared to the third quarter last year, to 32,144 barrels of oil equivalent per day. Allman-Ward said he expects production in Egypt to increase significantly in 2016, and for initial production from the Balsam Field in the Nile Delta to begin by the end of the year. Dana remains in discussions with Egypt over planned investments and capital expenses on field development in the country.
Still, Dana’s relationship with the Egyptian government remains characterized by the amount of back pay the Egyptian government owes the company: “Our receivables position remains a major area of concern,” said Allman-Ward. According to Bloomberg, Dana is owed $252 million by the Egyptian government, which could take until 2019 to recover.
Dana Gas reached an agreement last year to use export of condensate and liquid petroleum gas to recover its debts from the Egyptian government. With prices low, recovery of the funds will take longer.