Dana Gas PJSC (DANA), a fuel producer awaiting outstanding payments from Egypt and Iraq, said first- quarter profit more than doubled amid higher oil prices and lower spending, even as output declined.
Net income advanced to 206 million dirhams ($56 million) from 92 million dirhams a year earlier, the Sharjah, United Arab Emirates-based company said in a statement to the Abu Dhabi bourse today. Oil and natural gas production fell 4.5 percent to 5.73 million barrels of oil equivalent. Benchmark Brent crude gained 4.7 percent in the first quarter to $122.88 a barrel.
Gross revenue increased 13.6 percent to 700 million dirhams, while exploration expenses dropped 81 percent to 7 million dirhams, it said.
Shares gained as much as 5.1 percent, the most since Feb. 19, and traded 2.6 percent higher at 0.4 dirham.
Dana Gas shares have tumbled 39 percent in the past year as it struggles to obtain payments for its Egyptian and Iraqi operations and on concern it won’t have enough money to repay a $1 billion Islamic bond due in October. Bondholders of the Islamic debt hired London-based law firm Linklaters LLP last month to negotiate a restructuring, three people familiar with the matter said earlier this month.
The company appointed Deutsche Bank AG (DBK), Blackstone Group LP (BX:US) and Latham & Watkins LLP to advise on its sukuk, which expires on Oct. 31, according to the statement.
Although regional turmoil, the European debt crisis, and delayed payment “affect Dana’s ability to raise new funding, the company is committed to finding a consensual solution that is equitable to all stakeholders,” Dana Gas said.
Output from Egypt declined 27 percent to 34,500 barrels a day of oil equivalent, as pressure fell at older wells. The company collected 192 million dirhams against receivables in Egypt, it said. Trade receivables for operations in that nation stood at 825 million dirhams at the end of the quarter, according to the statement.
The company’s share of production from the self-ruled Kurdish region of northern Iraq grew 46 percent to 28,500 barrels a day of oil equivalent. Dana Gas collected 143 million dirhams against receivables, leaving the outstanding trade receivables for its Iraqi business at 1.04 billion dirhams.
“Dana Gas’s business object is to preserve and protect the value of its assets for its stakeholders and therefore it continues to balance operating and necessary capital expenditure within the available financial resources,” the company said.
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