UAE’s Dana Gas Q1 Profit Falls 32%

Dana Gas reported a 32 per cent drop in first-quarter profit on Thursday as the United Arab Emirates-based company failed to repeat a one-off gain which boosted earnings in the same period last year.

But Dana Gas, which has exploration and production assets in Egypt, Kurdistan and the UAE with an average quarterly output of 68,800 barrels of oil equivalent per day (boepd), hopes to recover part of its recevables from Egypt next month, chief Executive officer Patrick Allman-Ward told reporters.

Dana made a net profit of Dhs164 million ($44.65 million)in the three months to March 31, down from Dhs241 million a year ago, according to a statement to Abu Dhabi’s bourse.

The company said it made a one-off gain of Dhs143 million from an asset sale in the first quarter of 2013.

Dana Gas said in its quarterly results statement that it had received a payment of $3 million from the Egypt government and had not received any payments from the Kurdistan Regional Government since December 2013.

This resulted in trade receivables being higher by $68 million to a total of $583 million, resulting in a cash balance of $155 million.

Chief Executive Allman-Ward told reporters on a conference call earlier on Thursday that the company hopes to receive a payment from the Egyptian government in June.

“We have heard that the government of Egypt plans to pay between $1 billion and $1.5 billion of what’s owed to the petroleum sector.”

The company collected $134 million in Egypt last year, leaving the trade receivables balance for its operations there at $274 million at the end of December. At the end of the first quarter, Egypt’s trade receivables stood at $278 million.

It collected $69 million from Kurdistan in early 2013, but the flow of funds dried up over summer, leaving a trade receivable balance of $515 million at the end of 2013 – up from $354 at the end of 2012.

Non-payment prompted the company to file an arbitration case in October to confirm its rights under a 2007 contract with the Kurdish region government (KRG).

UAE-based companies like Dana Gas have been capitalizing on good relations between the UAE and Egypt’s army-backed government, which is trying to attract foreign money back to the country.

“We have been in discussions with the UAE government to try and ensure that the Emirati generosity flows preferentially to UAE companies.”

Total assets were unchanged at $3.53 billion at the end of March 2014