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Dana Gas Net Profit Drops 26.6 Per Cent 
to Dh88 million

ABU DHABI — Abu Dhabi listed Dana Gas net profit dropped 26.6 per cent to Dh88 million in 2009, well short of market expectations due to write offs, impairments.

The reduction is largely due to the write off of exploration costs, together with specific impairments in Tunisia and Nigerian asset value revisions, plus a reduction in inventory and land values, the company said in a regulatory
 filing on Monday.

The “Total Comprehensive Income, which includes gains on sales of investments rose 281.6 per cent to Dh458 million.

Revenue from the sale of hydrocarbons increased to Dh1.28 billion, with gross profit reaching Dh436 million, representing increases of 12 per cent and 69 per cent respectively compared to 2008.

They reflect the Company’s ongoing and growing operations in Egypt, plus a full year of condensate production sales from the Khor Mor field in the Kurdistan Region of Iraq.

Whilst a sale of 10 per cent of the company’s interest in Kurdistan, together with a sale of the Company’s 50 per cent interest in the Komombo Concession in Egypt generated significant profits, the full year net profit after tax of Dh88 million was lower than the Dh120 million generated in 2008.

However, Earnings before interest, tax, depreciation, amortization and exploration (EBITDAX) increased by 150 per cent Dh1.44 billion
 compared to 2008.

The Net Profit after tax excludes an unrealised gain of Dh370 million during 2009 on the Company’s investment in MOL, the Hungarian oil and gas company.

Dana Gas Chief Executive Officer, Ahmed Al Arbeed, termed his company an operationally ‘strong and successful’. “We have a good portfolio of assets,” he said. Al Arbeed said that Egypt exploration programme has been resoundingly successful, yielding eight discoveries in 2009 and a 40 per cent increase in 2P reserves at the end of the year.

“In addition, our end of year actual production run rate exceeded the target run rate of 40,000 
boepd”, he said.

James Dewar, Dana Gas Chief Financial Officer said the company had earmarked $200 million for the right “business opportunity” in 2010.

“The level of impairments and write-offs in 2009 was unusual, but our balance sheet is 
robust.” Dewar said.

Dana wrote off a portion of the carrying values of its inventory and investment properties, mainly in Egypt, to reflect their current market price, he added. “The impairment charges are from operations in Nigeria and Tunisia, but they are not significant assets and the market is not factoring these in. If it wasn’t for these items, the company probably would have made a quarterly profit,” said Hatem Alaa, HC senior research analyst in Cairo.
“We are still positive on the company’s prospects.”

· haseebhaider@khaleejtimes.com