Dana Gas posts Dhs66m profit in H1

Dana Gas, the Middle East’s largest regional private sector natural gas company, today announced its financial results for the half-year ended 30th June, 2020.

The Company’s H1 2020 net profit was $18 million (Dhs66 million) compared with $52 million (Dhs191 million in H1 2019 on a like-for-like basis and excluding one-off impairments, earn-out amounts, and deferred income. On a non-adjusted basis, the company recorded a loss of $19 million (Dhs69 million) as a result of a $37 million impairment charge related to oil and gas assets in Egypt due to low oil prices, and decreased value of its financial assets.

Revenue for the first six months stood at $181 million (Dhs664 million) as compared to $242 million (Dhs887 million) in H1 2019, down 25 per cent. The decrease is largely due to lower realised prices during the period, which had a $42 million impact, and, to a lesser extent, lower production in Egypt as a result of natural field declines. Realised prices in H1 2020 averaged $30/bbl for condensate and $28/boe for LPG compared to $51/bbl and $33/boe respectively in H1 2019.

The company implemented cost-cutting measures, achieving $2 million (Dhs7.3 million) saving in G&A costs with further savings expected in H2 2020. Capex was also cut by 72 per cent to $25 million (Dhs92 million) as all non-essential work was deferred.

In Q2 2020, Brent averaged $30/bbl and touched a low of $13/bbl on 21st April, 2020. Despite historical low prices, Dana Gas ended the second-quarter close to breakeven with a small net operating loss of $3 million, demonstrating its ability to stay resilient even in a low oil price environment given its fixed price long term gas contracts.

WAM