UAE-based natural gas company Dana Gas saw its H1 2019 net profit jump 483% to $140mn compared with $24mn in H1 2018. This was mainly due to the recognition at fair value of certain reserve based earn out entitlements amounting to $71mn. These are due from certain shareholders in Pearl Petroleum as considerations linked to the original share sale agreements, which were contingent upon proving up additional reserves in Pearl Petroleum which were confirmed by the recent independent reserves report by Gaffney Cline.
"Dana Gas's net profit of $140mn in the first half 2019 is a clear reflection of the company's strong operational and financial performance with strongly rising production and revenues from the KRI," said Dana Gas CEO Patrick Allman-Ward.
Excluding the $71mn, net profit from core operations increased by 187% to $69mn versus $24mn in H1 2018. This was principally due to an increase in KRI production post debottlenecking which added $20mn, Sukuk profit savings and reimbursement of arbitration costs.
Revenue for the first six months of the year advanced 3% to $242mn as increased production in the KRI added $27mn to the topline which was partially offset by $15mn in reduced revenue due to price declines and $5mn due to lower production in Egypt.
"An independent certification exercise has shown a 10% increase in the company's 2P reserves in the KRI to over 1 billion boe," Allman-Ward added. "This external reserve auditor's report confirms our view that the Khor Mor and Chemchemal Fields are world class and are probably Iraq's biggest gas fields."
The company's average production in H1 2019 was 68,200 barrels of oil equivalent per day (boed), a 7% increase as compared with 63,600 boed in H1 2018. Output in the KRI was up significantly to 32,400 boed in H1 2019 compared to 26,100 boed in H1 2018, while Egypt output was 4% lower at 34,100 boepd during the same time frame.