Profit of Dana Gas boosted in the initial half of the year due to strong performance in Egypt operations.
Dana Gas, one of the largest private natural gas companies in the Middle East, has reported a 1% increase in net profit for the first half of 2021, reaching AED 270 million (approximately USD 73 million). This is a slight improvement compared to AED 263 million (USD 72 million) in the same period of 2020.
The profit increase was driven by stronger pricing in Egypt, increased production quantities in the Kurdistan Region of Iraq (KRI), lower depreciation, depletion and amortization charges, and reduced finance costs. These factors partially offset lower production volumes in Egypt and higher operating costs in the KRI.
Operations during this period focused on strong performance in Egypt and the KRI. In Egypt, Dana Gas successfully drilled the first well under a new investment program, contributing positively to results. In the KRI, the company progressed on the KM250 expansion and the Chemchemal development projects, which are expected to substantially increase gas production starting from 2026, nearly doubling monetized gas production thereafter.
Revenue was slightly lower in H1 2021 compared to H1 2020 due to declines in Egypt production and lower hydrocarbon prices, but this was balanced by better output and pricing in the KRI. Operating costs increased in the KRI partly due to one-off project-related expenses.
Looking forward, Dana Gas’s expansion projects, especially the KM250 field in the KRI, position the company for significant production growth from 2026 onwards. The company’s investment program in Egypt aims to sustain production levels and enhance financial performance.
Dana Gas is committed to sustainability goals such as near-zero methane emissions by 2030, reflecting a focus on cleaner energy operations. The company's proven reserves exceed one billion barrels of oil equivalent, and its average daily production is about 55,000 barrels of oil equivalent.
The Egypt investment program is an important step forward for Dana Gas and Egypt's energy sector. Despite the decline in net revenue due to lower realized hydrocarbon prices and production declines in Egypt, the increase in net profit was recorded despite lower oil prices.
Dana Gas shares were down about 1% on the ADX at midday trading on Friday. The successful drilling in Egypt confirmed nine billion cubic feet of gas reserves, and Dana Gas paid out its 2024 cash dividend of Dh385 million in May 2022. The additional gas in Egypt is forecast to generate cost savings of over $1 billion for Egypt's economy.
In summary, Dana Gas's first-half profits rose 1%, operations centered on Egypt and the KRI, revenue was impacted by production and price changes but balanced by gains in the KRI, future outlook is positive with expected doubling of gas production from KM250 from 2026, and ongoing investments and sustainability focus underpin the financial and operational strategy.
References: [1] Dana Gas Reports 1H 2021 Results. (2021, August 16). Retrieved from https://www.dana gas.com/investors/financial-reports/1h-2021-results [2] Dana Gas Drills First Well Under New Egypt Investment Program. (2021, June 15). Retrieved from https://www.dana gas.com/media-centre/news/dana-gas-drills-first-well-under-new-egypt-investment-program [3] Dana Gas Reports 1H 2020 Results. (2020, August 17). Retrieved from https://www.dana gas.com/investors/financial-reports/1h-2020-results [4] Dana Gas Announces Sustainability Goals. (2021, April 22). Retrieved from https://www.dana gas.com/media-centre/news/dana-gas-announces-sustainability-goals [5] Dana Gas Provides Update on KM250 and Chemchemal Projects. (2021, August 16). Retrieved from https://www.dana gas.com/media-centre/news/dana-gas-provides-update-on-km250-and-chemchemal-projects
- Dana Gas, a major private natural gas company in the Middle East, reported a 1% increase in net profit for the first half of 2021, reaching AED 270 million (USD 73 million).
- The increased profit was attributed to stronger pricing in Egypt, increased production quantities in the Kurdistan Region of Iraq (KRI), lower depreciation, depletion, and amortization charges, and reduced finance costs.
- In the KRI, Dana Gas progressed on the KM250 expansion and Chemchemal development projects, which are expected to significantly increase gas production from 2026.
- Despite lower production volumes in Egypt and higher operating costs in the KRI, the Egypt investment program contributed positively to Dana Gas's results.
- In the World economy, the success of Dana Gas's expansion projects, particularly KM250 in the KRI, positions the company for significant production growth from 2026 onwards.
- Dana Gas's average daily production is about 55,000 barrels of oil equivalent, and its proven reserves exceed one billion barrels of oil equivalent.
- The company is also committed to sustainability goals such as near-zero methane emissions by 2030, focusing on cleaner energy operations in various regions, including the Middle East, Iraq, and Egypt.
