Abu Dhabi-listed company Dana Gas, which produces natural gas in Egypt and Iraq, reported a 50% decline in profit in Q1 as sales slumped due to lower hydrocarbon prices and 12% output reduction, reported Bloomberg. Company’s net income dropped to $6m in the first three months, compared to $12m in the same period of 2015. Production drop in Egypt and the Kurdish region of Iraq equals around 60,500boe/d due to field decline in Egypt and re-rating of production output in Iraq, informed The National.
In addition, Dana Gas is reported to continue cutting its capital expenditure, which fell under 30% compared with Q1 in 2015. The company has struggled to recoup payments from Egypt and the Kurdish region amid arbitration disputes with the Kurdistan Regional Government (KRG) and the creation of an alternative payment scheme in Egypt. Yet the company has started to receive regular payments from both countries, totaling $41.5m in this quarter.
In regard to company’s operation in Egypt, Dana Gas’ CEO, Patrick Allman-Ward, said that the deal signed with Egypt last year for the gas production enhancement, which includes a seven-year program to drill 37 wells and workovers on existing wells to increase production, was starting to materialize.
He added, according to Zawya, that “in Egypt during the quarter we have drilled and/or completed six successful development wells (including Balsam-4) and a new exploration well. All were successful and encountered gas bearing reservoirs on or above expectation.”