Dana Gas PJSC ("Company"), the Middle East's largest regional private sector natural gas company, today announced its Preliminary Unaudited Financial Results for the full year ended 31 December 2018.
Revenue was 4% higher at $470 million (AED1.7 bn) compared with last year's $450 million (AED1.65 bn) due to higher realised prices and incremental production in the KRI in Q4 2018. Gross Profit increased 19% to $140 million (AED513 mm) compared with $118 million (AED432 mm) in 2017 reflecting the Company's strong operational performance.
The Company's 2018 Net Profit, before Impairments, was $64 million (AED235 mm) as compared on a like-for-like basis with $5 million (AED18 mm) in 2017. The Impairments follow the annual year end oil and gas reserves valuation of its Zora field in the UAE and its fields in Egypt, and which required the Company to take an exceptional one-off non-cash impairment of $187 million (AED685 mm) for Zora and $59 million (AED216 mm) in Egypt. Including the Impairments, the Net Loss for 2018 is $186 million (AED681 mm) as compared to a Net Profit of $83 million (AED304 mm) in 2017. Following these results, the Company's book value per share stands at AED1.36 as of year end 2018.
Dr Patrick Allman-Ward, CEO of Dana Gas, commented: "2018 was a year of strong operational performance for Dana Gas. We delivered, a 30% increase in gas production from the KRI debottlenecking project which will increase revenues by $50 million on an annualised basis, we made large saving from restructuring the Sukuk, we achieved higher collections and the Company paid its first dividend".
Both our Revenue and Gross Profit were higher than last year and Net Profit also increased excluding a one off non cash impairment. With a robust cash balance and stronger balance sheet, we plan to pay an increased dividend of 5.5 fils in 2019.
We are proceeding with our exciting further expansion plans in the KRI and are looking to more than double our production and cash flows in the next three years. "
Sukuk, Liquidity and Collections
In 2018, the Company successfully concluded the Sukuk restructuring and a buyback program, which together has reduced the Sukuk from $700 million to $399 million. The Company will save $40 million in ongoing annual financing costs. Notwithstanding the Sukuk payments and a cash dividend of $95 million, the Company's cash balance at year end was $407 million.
The Group's total collection was $334 million with Egypt, KRI and UAE contributing $208 million, $114 million and $12 million respectively in FY 2018. In KRI, regular payments have been received and there are no outstanding receivables and in Egypt the outstanding receivables has been reduced by 39% in 2018 to $140 million at year end.
Production & Operations
Group production during 2018 averaged 63,050 boepd versus 67,600 boepd in 2017. In Egypt, production averaged 34,500 boepd versus 39,500 boepd in 2017, as a result of natural well declines however some of these declines were offset by the Balsam-8 well. In the KRI, average output increased slightly to 26,650 boepd from 25,750 boepd last year. Following completion of the debottlenecking project in the KRI, production increased by 30% and the aspirational target of 70,000 boepd was achieved in November. The Zora Field is being written-down following the year end reserve report and production is expected to cease during 2019.
The Company has an exciting line-up of projects. Key drivers of growth will be Egypt, where Block 6's high-impact multi-Tcf Merak well is to be drilled in the second quarter 2019. In the KRI, Pearl Petroleum is also undertaking a multi-well drilling programme at the Khor Mor and Chemchemal Fields, with expansion plans to progress and grow production by a further 500 MMscf/d of gas and 20,000 bbl/d of condensate over the coming three years.