Company AGM Reviews and Approves 2011 Operations Report & Financial Results
Dana Gas, the Middle East’s largest regional private sector natural gas company, held its 2011 Annual General Meeting (AGM) on Thursday 26 April 2012, Chaired by the Company’s Honorary Chairman H.E. Sheikh Ahmed Bin Sultan Al Qasimi.
Dana Gas’ Chairman, Mr. Hamid Jafar, reported on the Company’s 2011 business activities and financial performance. The AGM approved the Board of Directors’ report on the Company’s activities and the financial statements together with the Auditors report for the year ended 31 December 2011.
When giving an overview on financials, receivables and growth, Mr Hamid Jafar, Chairman of Dana Gas, said in a statement to shareholders at the AGM: “2011 proved to be a very successful year for the Company’s operations, despite the regional political and economic unrest. The oil and gas sector, particularly in Egypt and Kurdistan Region of Iraq, is facing financial challenges in the short term and we are working together with the host governments to maintain their supply of gas whilst agreeing payment plans for overdue monies that are aligned to our shareholders’ interests and the respective countries.”
For 2011, the company achieved gross revenues of AED 2.53 billion, a 42% increase on last year due to higher production during the year coupled with higher international hydrocarbon prices. This resulted in a record gross profit of AED 1.33 billion.
Dana Gas has three principal areas of operations: Egypt, the Kurdistan Region of Iraq, and the UAE. Mr Jafar provided shareholders with an update on the Company’s activities in each area starting from Egypt, where production in 2011 was 15.5 million barrels of oil equivalent (mmboe), averaging 42,500 barrels of oil equivalent per day (boepd). Additional production during the year from six new wells helped to offset the natural decline in production from existing wells and enabled the company to maintain production at a similar level to 2010.
Mr. Ahmed Al-Arbeed, Chief Executive Officer, said: “Dana Gas continues to pursue opportunities to expand and build its business. The Company’s operational progress during 2011 has continued its remarkable track record, which both reflects the high quality of our hydrocarbon assets as well as being a testament to the skills and commitment of our professional staff who continue to deliver first class results across our business units. Dana Gas has established itself as an important regional oil & gas exploration and production company. We have continued to grow our production and profits every year since we first started and we will continue to pursue our ambitious long-term growth strategy to deliver value to all of our stakeholders.”
In the Kurdistan Region of Iraq, Dana Gas continues to deliver gas to the two major regional power stations, and with the completion and start-up of two new LPG processing trains, the Company’s facilities are now fully operational. During the course of the year, the Company also collected a part payment for the receivables owed to the Company by the Kurdistan Regional Government (KRG).
Also in Egypt, Dana Gas is making good progress with the development of the new Natural Gas Liquids plant in Ras Shukheir in which the Company owns a 26.4% interest in partnership with EGAS and APICORP. The construction of the facilities is advancing well with start up scheduled for Q2 2012. The extracted propane will be sold to international private-sector clients for export, and the butane to the Egyptian Government, thus creating an important new revenue stream for Dana Gas. The plant is designed to extract up to 110,000 tons per annum of propane and 20,000 tons per annum of butane from a gas stream of 150 mmscfd. The initial throughput of gas is expected to start at 90 mmscfd.
Dana Gas’s UAE Gas Project continues to await the delivery of gas from the National Iranian Oil Company (“NIOC”). Dana Gas’s joint-venture partner in the UAE Gas Project, Crescent Petroleum, continues to seek a legal ruling on the gas deliveries and expects a decision from the arbitration tribunal in this regard during 2012.
Mr. Al-Arbeed concluded: “We look forward to strong performance in 2012, during which our prime focus will remain on growing our cash flows and maximising shareholder value. We plan to steadily build our asset base, albeit prudently managing our financial resources in light of regional and global circumstances”.
Mr. Ahmed Al-Arbeed, the company CEO, also shared with the Board of Directors of the Company his intention to retire full-time executive responsibilities in September of this year, after leading the Dana Gas management for the past 3 years. The Board thanked Mr. Al-Arbeed for his years of dedicated service which have seen the company grow into a recognized player on the region’s gas industry. A Board Committee was formed to oversee the search for qualified candidates to replace Mr. Al-Arbeed as CEO ensuring a smooth handover to his successor. Mr. Al-Arbeed expressed his intention to remain as a member of the Board of Directors, as he has been since the company’s establishment in 2005.