Dana Gas on Sunday announced its financial results for the first quarter ended March 31, 2021. Net profit increased by 41% in Q1 2021 to $24 million (AED 88 million) compared to $17 million (AED 62 million) in Q1 2020.
The increase in net profit was the result of improved revenues from increased production in the Kurdistan Region of Iraq (KRI) and a reduction in financial costs due to lower borrowings in Q1 2021 compared to Q1 2020, the company said in a statement.
Revenue was $106 million (AED 389 million), 2% higher than $104 million (AED 382 million) in Q1 2020. The improved performance was mainly due to a 9% increase in production in the KRI.
Realized price averaged $44/bbl for condensate and $33/boe for LPG, compared to $41/bbl and $30/boe respectively in Q1 2020.
Dana Gas CEO Dr. Patrick Allman-Ward said: Dana Gas delivered a solid quarter with robust operating performance, continuing the positive momentum of the prior period. In the KRI, we are pursuing our expansion plans to significantly boost production from 440 Mscf/d to 690 Mscf/d by April 2023. This will contribute positively to our results.
“We remain fully committed to managing our producing assets in Egypt for the benefit of all our stakeholders and to focusing on evaluating the exciting potential of our offshore Block 6 concession area as quickly as possible,” he added.
Group production in the first quarter of 2021 averaged 64,900 bopd, an increase of 2% from 63,650 bopd in the first quarter of 2020.
The increase in the first-quarter production was driven by KRI, which increased by 9% to 35,300 bpd from 32,400 bpd, supported by the significant increase in production in the fourth quarter of 2020, following the completion of the Khor Mor plant bypass project in July 2020.
Production in Egypt decreased by 5% to 29,050 bpd, which was more than offset by increased production in KRI.
In KRI, Pearl Petroleum – the consortium of companies operated by Dana Gas and Crescent Petroleum – has fully taken over the Khor Mor field expansion project. The first gas train will add 250 million cubic feet per day of additional gas production needed to power local power plants.
Construction on the project had been suspended due to the COVID pandemic, but is now on track for a new target start date of April 2023, following an agreement to lift the force majeure. The KM250 expansion project involves an additional $600 million investment by Pearl to increase production by nearly 60%.
Last month, Dana Gas announced its decision to retain and operate its onshore assets in Egypt alongside the highly prospective Block 6, and the company is currently evaluating its Block 6 concession area to drill an exploration well as soon as possible. “We have maintained our strong financial position with increased KRI production and lower financing costs following the repayment of the company’s outstanding Sukuk in Q4 2020.
I am pleased that we have maintained the dividend to shareholders, for the fourth consecutive year, despite adverse economic conditions,” concluded the Dana Gas CEO.