Dana Gas has received a payment of $39 million (Dhs143 million) from the Egyptian Government in December, the company announced on Wednesday.

This has reduced its receivables from the North African state below $30 million to its lowest levels since commencing operations there in 2007. It also complements what has already been a year of significant increases in collections from Egypt, increasing the company’s 2021 Egypt collections by 130 per cent to $184 million (Dhs674 million) compared to $80 million received in 2020.

Dr Patrick Allman-Ward, Dana Gas CEO, said, “We are extremely pleased to have received the latest payment from the Egyptian government which takes down our outstanding receivables to its lowest level since we started operations in the country.

“The payment underscores the Government of Egypt’s commitment to settle oil and gas companies’ receivables. The acceleration of payments will further enhance the country’s ability to attract more international investment, which will in turn boost economic growth. The funds received from the Egyptian government gives Dana Gas further confidence in pursuing its future investment plans in the country.”

Dana Gas has invested over $2 billion since first entering Egypt in 2007. It is currently the fifth-largest gas producer in the country. In the third quarter, Dana Gas’s Egypt production stood at 29,200 boepd.

Sharjah-based Dana Gas, one of the largest private natural gas companies in the region, swung to a record net profit for the nine months ended Sept.30 on higher oil prices, improved operational performance and other income.

The company posted a $279 million net profit for the January to September period compared with a loss of $379m in the same period last year, it said in a statement to the Abu Dhabi Securities Exchange, where its shares are traded. The net profit included “other income” of $608 million and a $78 million reversal of impairments related to Egypt assets, the company said.

Revenue for the first nine months increased 27 per cent to $334 million compared with $262 million in the same period last year, supported by higher oil prices and higher production in the Kurdistan region of Iraq (KRI).

Dana Gas also reported a net profit of $140 million for the three months to the end of September compared with a net loss of $360m in the same period last year. This included an impairment of $373 million in respect of its Egyptian assets, according to the filing.

Oil prices have rebounded as demand for crude surges on the back of a strong recovery by the global economy, which slumped into its deepest recession since the 1930s amid the pandemic.

Oil demand in 2021 is expected to grow by 5.8 million barrels per day, with global consumption hitting 96.6 million bpd, Opec data released last month showed.

“The steps the company has taken to increase production and reduce its cost structure and the progress it has made in increasing collections has well-positioned Dana Gas to benefit from rising energy prices and create shareholder value,” Patrick Allman-Ward, chief executive of Dana Gas, said.

“Operationally, the company’s production in the KRI grew by 7 per cent and is on track with its expansion plans, with first gas from the KM250 project scheduled for April 2023. In Egypt, a five-well drilling programme has concluded and the additional production has almost entirely offset natural well declines.”

The board of Dana Gas proposed a 27 per cent increase in annual dividend and called for a general assembly on December 9 to approve the new dividend policy.

Oil and gas production in the first nine months of the year rose to 63,200 barrels of oil equivalent per day, compared with 63,000 boepd for the same period last year.

The small rise in output was due to the company’s Kurdish assets, which helped offset declines in Egypt. Production from Iraqi Kurdistan rose 7 per cent to reach 34,000 boepd, while output from Egypt fell 4 per cent to 29,200 boepd due to natural field depletion.

The steps the company has taken to increase production and reduce its cost structure has well positioned Dana Gas to benefit from rising energy prices. Collections from both regions for the first nine months of 2021 increased 102 per cent year on year to $256m from $127m in the same period last year, the company said.

In Iraq, Dana Gas saw its share of collections from sales of condensate, LPG and gas rise 77 per cent to $131m in the first nine months of 2021 over the same period the previous year.

In Egypt, Dana Gas collected $125m during the first nine months of 2021, compared with $53 million in the same period of 2020.

The company’s cash position was $200 million, compared with $108 million at the end of 2020.

In September, an international arbitration tribunal awarded Dana Gas $607.5 million in compensation for damages in a case against Iran’s state-owned energy producer. The dispute concerns a 25-year gas sales and purchase contract between Dana Gas affiliate Crescent Petroleum and the National Iranian Oil Company.