Dana Gas has reported a net profit of US$157 million in 2019 compared to a loss of $186 million in 2018. The increase in profitability in 2019 was supported by a significant increase in production from the Kurdistan Region of Iraq (KRI).
Revenue was $459 million in 2019 compared to $470 million in 2018 due to lower realised prices and lower production in Egypt partly offset by increase in production in KRI. The greater production numbers in Iraq helped offset partly the impact of lower prices.
Dr Patrick Allman-Ward, CEO of Dana Gas, said: "Dana Gas registered strong performance metrics in 2019 underscoring its increasing financial resilience in what has been a challenging year for the oil industry. Net profit from our normal operations nearly doubled to $115 million, supported by an increase in production from the Kurdistan Region of Iraq despite the drop in realised prices. The strong set of results are supportive of a dividend payment, subject to necessary approvals."
"Looking ahead, the company's expansion plan in the KRI is on schedule, with delivery from the first gas train expected in 2022. This will raise production to 650 MMscf/d from the current rate of circa 400 MMscf/d. Over 90 per cent of Dana Gas's proven reserves are located in the KRI, so we will continue our focus here as we look to delivering on this vast potential."
In the second half of 2019, the Company launched a strategic review of its assets in Egypt as part of a process to optimise its portfolio. The Company has since received numerous bids and is finalising the technical and commercial evaluation, with a final decision due by the end of March. Other developments that took place in 2019 included the drilling of the deep-water Merak-1 well, Block 6, in Q2 2019, on schedule and under budget. The well, unfortunately, did not encounter commercial hydrocarbons.
In the KRI, Pearl Petroleum embarked and completed two appraisal wells and 6 workovers in Khor Mor and one appraisal well in Chemchemal. Pearl has also been progressing with its expansion plans in Khor Mor which will take production up to 650 MMscf/d in Q1 2022, and 900 MMscf/d in 2023.
Group production rose 5 per cent during 2019, averaging 66,200 boepd versus 63,050 boepd in 2018. Production was boosted by an 18 per cent jump in output from the KRI, which reached 31,500 boepd. This offset drops in production from Egypt, which fell 4 per cent to 33,000 boepd versus 34,500 boepd in 2018, and the UAE, which averaged 1,000 boepd in 2019.