DUBAI (Bloomberg) -- Dana Gas PJSC profit nearly doubled in the first quarter as the United Arab Emirates-based natural gas producer boosted output.
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Net income rose to 40 million dirhams ($11 million) from 22 million dirhams a year earlier, the company said Thursday in a statement to the Abu Dhabi stock exchange. Sales climbed 44% to 432 million dirhams.
Dana Gas, which pumps most of its gas at fields in Egypt and Iraq, is seeking to recover payments from both countries for overdue bills. The company was owed $1 billion from Egypt and the self-governed Kurdish region in northern Iraq at the end of the quarter. The receivables rose from $982 million at the end of 2016 because payments from Egypt slowed, CEO Patrick Allman-Ward said on a media conference call.
Hydrocarbon output increased 16% to 69,900 boed on increased production in Egypt, Allman-Ward said. Realized prices rose to $42/boed from $30/boed in the first three months of 2016, the company said in a statement.
New investment in Egypt will depend on the country’s ability to pay for current deliveries, the CEO said. Dana Gas is “always looking at opportunities for bringing investors in” for all of its assets, Allman-Ward said. BP Plc joined Dana Gas at an exploration project in Egypt in 2015.
Cash on hand at the end of March slumped to $289 million from $302 million at the end of 2016. The company in April repaid a $60 million loan related to a gas project in the emirate of Sharjah, where the company is based, Allman-Ward said.
Dana Gas asked bondholders this month to accept changed terms on $700 million of debt coming due in October as the company seeks to restructure borrowings for the second time in five years.
Dana Gas Egypt's production was solid in Q1 2017. The onshore gas processing plant capacity at El Wastani remained at maximum output. Total output for the first quarter was 40,950 barrels of oil equivalent per day (boepd), a 24% increase on the 33,000 boepd output in Q1 2016.
The Company has significantly reduced its capital and operational expenditure plan for 2017, focussing on completing projects in progress or asset critical projects. In the second quarter 2017, the El Wastani plant is planned to be shut down either in full or in part for an estimated ten day period whilst work is carried out to improve plant performance and reliability.
After the end of the first quarter 2017, the Company concluded the first international condensate sale in Egypt under the Gas Production Enhancement Agreement (GPEA). The first cargo of approximately 150,000 barrels of Wastani condensate was loaded on 15 April 2017. The buyer issued a letter of credit under which payment amounting $7.2 million will be paid directly to Dana Gas in US dollars. The cash proceeds generated from the Government's share of the incremental condensate sales will contribute to paying down the outstanding receivables owed to Dana Gas by the Egyptian Government.