Dana Gas has announced that natural gas currently constitutes 75 per cent of the company’s production, which is sold under long term gas sale contracts with host governments at prices which are unaffected by falling oil prices.

In a press release issued by the company on Monday, it said that these gas sales account for approximately half of the company’s income, leading to sustainable revenues even in low oil price environments.

Commenting on the announcement, Patrick Allman-Ward, CEO of Dana Gas, said, “Since half of our income is protected in low oil price environments, we are competitive and opportunistic at the current environment. We are obviously monitoring the market closely and responding accordingly. The Company already has an excellent track record of cost control and we will obviously be looking at identifying potential areas for further cost reductions should the low oil price environment persist.

“In the meantime, the company will continue the implementation of its planned projects in the Kurdistan Region of Iraq, KRI, which will lead to significant growth in both production and revenues in the years to come.”

The Company has recently reported a net profit of $157 million (Dhs 575m) in 2019 compared to a loss of $186 million (Dhs682m) in 2018. Net profit from core operations, on a like-for-like basis, excluding one off impairment, earnout and deferred income, increased by 80% to $115 million (Dhs422m) compared to $64 million (Dhs235m) in 2018.

The increase in profitability in 2019 was supported by a significant increase in production from the KRI, which added $40 million which helped offset partly the impact of lower prices. In addition, during the year, the Company recognised earn out and deferred income entitlements which contributed positively to the bottom line.

Revenue was $459 million (Dhs1.68 billion) in 2019 compared to $470 million (Dhs1.72b) in 2018 due to lower realised prices and lower production in Egypt partly offset by increase in production in KRI.

Agencies