Abu Dhabi-listed Dana Gas reported net profits of $24mn in the first quarter of this year, up 41pc versus the corresponding quarter in 2020, as it boosted production from the Khor Mor gas field in the semi-autonomous Kurdistan region of northern Iraq.
Announcing its first quarter results, the company also reported revenues of $106mn, which is up 2pc year-on-year.
The improved performance was mainly due to a 9pc production increase in the Kurdistan region of Iraq (KRI), along with higher oil prices which averaged $44/bl for condensate and $33/barrel of oil equivalent (boe) for LPG. These compared to $41/bl and $30/bbe respectively in the first quarter last year.
The company's total first quarter production averaged 64,900 boe/d, up 2pc year-on-year. This is up from Dana's 2020 average of 63,200 boe/d but still lower than the 66,200 boe/d produced in 2019.
Much of the increase was driven by higher output from the KRI which grew by 9pc to 35,300 boe/d after Dana's Khor Mor gas plant by-pass project was completed in July 2020. Dana and its partners at the Pearl Petroleum consortium have resumed work to expand capacity at Khor Mor, adding two 250mn ft³/d gas processing plants to boost Khor Mor's capacity to 650mn ft³/d (6.69bn m³/yr) by 2023 and 900mn ft³/d in 2024, from 400mn ft³/d now. Work had been suspended due to the Covid-19 pandemic. Current production is above capacity at 440mn ft³/d.
The output increase at the KRI field more than offset declines from its operations in Egypt, which fell 5pc to 29,050 boe/d, Dana said.
The company was able to collect $35mn from the Kurdistan Regional Government (KRG) during the quarter, and said that at current oil prices, it expects to settle the balance of its KRI overdue receivables "by the third quarter of this year." It also collected $23mn from Egypt in Q1. Receivables at the end of the quarter stood at $131 million, it said.
Dana had hoped to divest from its mature oil and gas assets in Egypt, selling them to Houston-based IPR Energy for as much as $236mn. This was part of a strategy to reduce its debt and focus on developing resources in Kurdistan. But Dana said it will now continue to own and operate the assets after it could not satisfy the conditions for the sale.
