- Significant reduction of outstanding debt to US$850 million with overall lower debt servicing requirements
- Deal structured to ensure that potential dilution of shareholders remains substantially similar to current levels
- Refinancing will place Dana Gas on a stronger financial footing in the interests of all stakeholders
Dana Gas PJSC, (‘Dana Gas’ or ‘the Company’), the Middle East’s first and largest private sector natural gas company, is pleased to announce the detailed terms, conditions and implementation information for the refinancing transaction (the “Transaction”) in relation to its US$1 billion 7.5% Sukuk-al-Mudarabah due 31 October 2012 (the “Existing Sukuk”).
Key Transaction Highlights:
- Lock-up and Standstill Agreement signed by the Ad Hoc Committee of Sukukholders (‘The Ad Hoc Committee’), which represents the majority of the outstanding principal amount of the Existing Sukuk. Subject to the terms of the Agreement, the members of the Ad Hoc Committee have undertaken to vote in favour of the Transaction
- Reduction in the Company’s outstanding debt from US$1 billion to US$850 million via US$70m cash pay-down and cancellation of another US$80 million of the Existing Sukuk already owned by the Company
- Remaining US$850 million split into two tranches to ensure potential dilution for shareholders remains substantially similar to current levels: a US$425 million Ordinary Sukuk and US$425 million Convertible Sukuk (together the “New Sukuks”), each with 5-year maturity to ensure long-term financing
- The average combined profit rate on the two New Sukuks is 8%, representing a slight increase over the Existing Sukuk profit rate of 7.5%
- This average profit rate of 8%, together with the lower debt amount of US$850 million, constitutes a lower debt servicing obligation on the Company as compared to the debt servicing obligations under the Existing Sukuk
- The security package available to holders of the New Sukuks will be enhanced by US$300 million of value (inclusive of security over receivables of the Company’s Egyptian assets), but is restricted to the Company’s Egyptian assets and certain UAE assets
- The Conversion price of the Convertible Sukuk has been set at a 50% premium to the 75 calendar day volume-weighted average price, measured over a period commencing on 1 December 2012 (with a floor of AED 0.75 and cap of AED 1.00)
- Dana Gas has the option to pay down the outstanding principal amount of the New Sukuks prior to the new maturity date of 31 October 2017, subject to the applicable call premia on the Ordinary Sukuk and the soft call provisions on the Convertible Sukuk.
Dr. Adel Khalid Al-Sabeeh, Chairman of the Board of Dana Gas said,
“We believe that the terms being announced today represent a comprehensive, long-term solution which balances the interests of all stakeholders. The Board plans to secure necessary stakeholder consents for implementation of the Transaction, while the Company continues to focus on achieving its growth potential over the coming years and continue to realise value.”
Rashid Al-Jarwan, Executive Director and Acting Chief Executive Officer of Dana Gas said:
“Dana Gas has a robust asset base and has successfully grown revenues, production, reserves and asset values consistently over the last 5 years, in line with our strategy. The Company’s liquidity constraints were caused by well-known external factors, and we believe that these revised terms of the New Sukuks place Dana Gas on a firm foundation for further growth and progress.”
Subject to approval by sukukholders and shareholders, the Transaction will include:
Reduction in Company’s outstanding debt from US$1 billion to US$850 million:
The Company’s debt burden will immediately be reduced by US$150 million via (i) US$70 million cash pay-down of the Existing Sukuk at closing (which may, for a period prior to closing of the Transaction, be increased at the option of the Company), and (ii) the cancellation of US$80 million principal amount of the Existing Sukuk already owned by the Company.
The remaining principal amount of the Existing Sukuk of US$850 million will be split into two new sukuk instruments with a five year maturity consisting of an Ordinary Sukuk and a Convertible Sukuk of equal principal amounts of US$425 million each (reduced pro-rata if cash pay-down at closing is greater than US$70 million).
Each existing sukukholder will be allocated an equal amount of the two New Sukuks, pro rata to the aggregate principal amount of the Existing Sukuk held by each holder immediately before the closing of the Transaction.
Lower debt servicing obligations for Company with average profit rate of 8% on lower debt amount of US$850 million:
Existing Sukuk holders will receive an average profit payment of 8% combined across the New Sukuks.
The Ordinary Sukuk will have a 9% fixed profit rate (payable quarterly in cash) and will mature on 31 October 2017. The Convertible Sukuk will have a 7% fixed profit rate (payable quarterly in cash) and will mature on 31 October 2017.
Security package has been enhanced by US$300 million of value (inclusive of security over receivables of the Company’s Egyptian assets) but is restricted to Egypt and certain UAE assets:
Both instruments will rank pari passu with each other and will be secured on an equal and ratable basis and will benefit from an enhanced security package of approximately US$300 million of value in addition to the existing security on the Existing Sukuk. The security package is restricted to Egypt and certain UAE assets.
The covenant package for the New Sukuks will be substantially similar to that in the Existing Sukuk.
The Conversion price has been set to recognise long term support of shareholders and to ensure that potential dilution remains substantially similar to current levels
At closing of the Transaction, existing shareholders will continue to own 100% of the Company’s equity. Assuming later conversion of the new Convertible Sukuk, the relative ownership of existing shareholders and the holders of the new Convertible Sukuk would be in a range similar to that in the Existing Sukuk to ensure that potential dilution remains substantially similar to current levels. The potential dilution under the terms of the Existing Sukuk is circa 21%, and potential dilution under the new Convertible Sukuk would range between 19% and 24%, depending on where the conversion price is eventually set.
The Conversion Price for the new Convertible Sukuk will be set at a 50% premium to the 75 calendar day volume-weighted average price, measured over a period commencing on 1 December, 2012, with a floor of AED 0.75 and cap of AED 1.00.
In the event that the effective Conversion Price is less than AED1.00, the economic value difference between the effective conversion price and AED1.00 shall be paid in cash at conversion, or at the Company’s option, in additional shares of the Company.
Customary adjustments of a similar nature to the terms of the Existing Sukuk would be applicable to the conversion price to reflect any applicable corporate events in the future such as new share issues, dividend payments, etc.
Conversion rights may be exercised by the new Convertible Sukuk holders at any time after 31 October 2013.
Dana Gas has the option to pay down both New Sukuks before maturity:
Under the agreed terms, there is no prohibition on repaying the New Sukuks early. The Ordinary Sukuk could be redeemed prior to maturity in each of the five years of its term at premium to par that ranges from 9% to 0%. The Convertible Sukuk could also be redeemed prior to maturity at substantially similar terms to those in the Existing Sukuk documentation. The Company is also allowed to make unrestricted open-market purchases, at any point of time, of either or both the Ordinary Sukuk and the Convertible Sukuk.
Management appointments and investor relations:
There is no change in the Company’s Board of Directors. The Company will exert its best efforts to recruit the new CEO by end of the first quarter 2013, and the CFO and Investor Relations Director by the end of the second quarter 2013.
The Company will assess the possibility of an international listing of its upstream assets in due course. If it deems that this will enhance value for both shareholders and sukukholders, the Company will seek the necessary consents as part of the consent solicitation process and pursue this course of action.
Other key terms of the New Sukuks
Documentation of the New Sukuks shall be governed by English law, certain Shariah documents by UAE law, and the security documents by applicable local law, as with the Existing Sukuk.
The New Sukuks shall be listed on the London Stock Exchange or another international stock exchange, as with the Existing Sukuk.
- In order to successfully complete the Transaction, the Company will seek the consent of the shareholders, existing sukukholders, and the relevant regulatory authorities. It is currently expected that the Transaction will be completed early in the second quarter of 2013.
- The Company currently intends to schedule an extraordinary general meeting (“EGM”) in the first quarter of 2013 to request shareholder approval of the terms of the Transaction. The request to the shareholders for an EGM will be accompanied by a description of the terms of the Transaction that require such approval.
- Similarly, the Company will seek consent from existing sukukholders for the proposed Transaction at a meeting of sukukholders in the first quarter of 2013. The request for sukukholders to approve an Extraordinary Resolution will also be accompanied by a description of the terms of the Transaction.
- The Company will also, in accordance with its disclosure obligations under the ADX listing rules as well as the rules of the London Stock Exchange, keep all relevant parties informed of any material events.
- If any of the terms of the Transaction as described above are amended in consultation with, and with the agreement of the Ad Hoc Committee, such amendments will be communicated to all relevant stakeholders in accordance with all applicable laws before the consent of such stakeholders is sought for the Transaction.
- For the period from 31st October 2012 to closing, Existing Sukuk holders will receive a profit payment of 8% based on aggregate principal amount of the Existing Sukuk (payable at closing)
The Company has made available on its website (www.danagas.ae), a presentation that includes key Transaction terms, next steps, and an update on certain business operations.
The Company is being advised by the Blackstone Group International Partners LLP, Deutsche Bank (as Dealer Manager) and Latham & Watkins LLP. The Ad Hoc Committee is being advised by Moelis & Company UK LLP and Linklaters LLP.
For media enquiries only, please contact:
Azadeh Varzi / Alex Blake Milton
Tel: +442074045959 / +97144466270
The Blackstone Group International Partners LLP
Martin Gudgeon / Shirish Joshi
Tel: +44 20 7451 4398 / +44 20 7451 4067
Deutsche Bank AG, London (as Dealer Manager)
Reid Payne / Ege Akcasoy
Tel: +44 20 7547 6153
Deutsche Bank AG, Filiale Dubai
Ad Hoc Committee Advisors
Moelis & Company UK LLP
Charles Noel-Johnson / James Butcher
Tel: +44 20 7634 3568 / +44 20 7634 3639
Cautionary Note Regarding Forward-Looking Statements and Other Disclaimers
This press release contains forward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms “believes,” “estimates,” “anticipates,” “expects,” “intends,” “may,” “will” or “should” or, in each case, their negative, or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this press release and include statements regarding our intentions, beliefs or current expectations concerning, among other things, our results of operations, financial condition, liquidity, prospects, growth, strategies and the industry in which we operate.
By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. We caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, our financial condition and liquidity, and the development of the industry in which we operate, may differ materially from those made in or suggested by the forward-looking statements contained in this press release. In addition, even if our results of operations, our financial condition and liquidity, and the development of the industry in which we operate, are consistent with the forward-looking statements contained in this press release those results or developments may not be indicative of results, conditions or developments in subsequent periods.
All forward-looking statements attributable to us are expressly qualified in their entirety by these cautionary statements. We undertake no obligation to publicly update or publicly revise any forward-looking statements, whether as a result of new information, future events or otherwise. All subsequent written and oral forward-looking statements attributable to us or to persons acting on our behalf are expressly qualified in their entirety by the cautionary statements referred to above and contained elsewhere in this press release.
Under no circumstances shall this announcement constitute an offer to sell, or the solicitation of an offer to buy, any securities nor shall there be any sale of the securities mentioned in this press release in any jurisdiction in which such offer, solicitation or sale would be unlawful. The potential transaction described in this announcement and the distribution of this announcement and other information in connection with the potential transaction in certain jurisdictions may be restricted by law and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Information regarding the potential transaction and the securities shall be contained in an offering document, if any, that may be produced by the issuer of the securities and potential investors should refer to such offering document when, and if, it becomes available. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. This communication is not, and may not be used in connection with, an offer of securities for sale or the solicitation of an offer to buy securities in the United States, Australia, Canada, Japan, Bahrain or Qatar or any other jurisdiction where such offers or solicitations are not permitted by law. The Issuer has not registered, and does not intend to register, such securities in any of these jurisdictions and does not intend to conduct a public offering of such securities in any of these jurisdictions. In particular, no such securities of the Issuer have been nor will be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and such securities may not be offered, sold or delivered within the United States or to, or for the account or benefit of, U.S. persons (as defined in Regulation S under the Securities Act) except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. This information is not to be shown or given to any person other than the recipient, and is not to be forwarded to any other person, copied or otherwise reproduced or distributed to any other person in any manner whatsoever. Failure to comply with this directive can result in a violation of the Securities Act.
Dec 2 2011
Majid Jafar, Board Member
Forty years ago, seven desert sheikhdoms came together to announce their political union under a new federation. The region and the world were skeptical about the chances for success and survival of this new country, and with good reason – with British protection withdrawn, and territorial claims by larger established neighbours such as Saudi Arabia, Iran and Oman, the odds were not in its favour.
The UAE had hardly any economic base, very basic standards of health and education, and even its internal borders had not yet been defined. Plus history was not on its side – Arabs uniting politically had been virtually unknown since the early days of Islam, and more recent attempts at political union between Egypt and Syria and between Iraq and Jordan had ended in failure.
Yet four decades on, the United Arab Emirates is a haven of peace, prosperity and progress in an otherwise often troubled region. It is the second largest economy in the Arab world, and the most diversified in the GCC. It has built the best infrastructure in the Arab world as well, and attracts the best and brightest talent from the region and internationally. And it enjoys excellent international relations and is admired regionally and worldwide.
How can this seeming miracle have been achieved in such a short time, against all the odds and despite decades of conflict within the region? We can identify four principal reasons for the success the UAE has achieved.
First and foremost, the UAE has been blessed with enlightened leadership. No story of the UAE is complete without paying tribute to the wisdom and foresight of the founding fathers of the UAE: Sheikh Zayed, the first President, Sheikh Rashid, the first Vice President, and their brothers, the other Rulers of the UAE at the time.
They built solid foundations through a constitution that envisaged an efficient, decentralised administration and a free-market economy when these concepts were not popular yet in the West, let alone in the Arab world. And the new generation of leaders, led by Sheikh Khalifa bin Zayed, have followed these principles and built upon them to accelerate the national development in many spheres.
Second, and also very importantly, the nature of the Emirati people themselves is one of the main reasons for the country’s success. Kind, hospitable, generous and accepting of other peoples and cultures while respecting their own heritage and traditions – Emiratis above all desire peace and prosperity and abhor conflict, whether internal or external.
These traits have enabled the successful growth of a multicultural society where a minority of nationals lives in harmony with expatriates from every corner of the globe. The nature of the Emirati people makes this possible, and it would be unthinkable in many other countries in the world.
This leads us to the third reason for the UAE’s success – if we were to encapsulate the UAE in a single world, it would be tolerance. This central theme lies at the core of the country’s DNA, and is the source of its economic success, strong society and international friendships. People from all nations, ethnicities and faiths are made to feel welcome and respected, and the best technology and practices from West or East alike are learnt and adopted. This is what makes the UAE a truly Islamic society, true to the principles of Islam during its golden age, when learning and excellence in all areas were core values.
The UAE’s historical origin as a centre of regional trade has carried forward into the 21st century to make it a global hub of commerce in many sectors, where ease of doing business and the welcome extended to foreign capital and entrepreneurship are central policies. And residents can enjoy unparalleled diversity and multiculturalism, with Christmas or Diwali celebrations complementing the Eid festivals, and respect and tolerance shown for all. The government cares for its people, whether at home or abroad. I will never forget the emotion and gratitude of my Lebanese friends when Sheikh Khalifa ordered the UAE Embassy in Beirut not to rest until all UAE residents were evacuated from Lebanon at government expense during the Israeli bombing in 2006.
The fourth and final reason for the UAE’s economic success, in particular, lies in the federal system, which the founding fathers created to enable decentralised decision-making, multiple development strategies, and internal competition and cooperation leading to a large internal market and enhanced competitiveness in every field.
In whatever sector, whether in transport and trade, where the UAE has the top two ports in the whole region despite being a small country; to aviation and tourism, where its airlines and hotels are the envy of the world; to media and telecoms, where it sets standards for others to follow; to education, where its schools and universities attract students from across the region, the UAE has surpassed many of its neighbours.
On this 40th birthday of our nation, let us take time to consider all of these blessings and achievements. May God bless our beloved UAE, its leadership, citizens and all its residents. And here’s to the next 40 years of growth, prosperity and peace.
Majid Jafar is the chief executive of Crescent Petroleum and a board member of the Sharjah Chamber of Commerce and Industry
Nov 14 2011
• Production increases 20% compared to 3Q 2010
• Net Profit more than quadruples compared to 3Q 2010
3 Months to September 30th 2011
Dana Gas PJSC, the Middle East’s largest regional private sector natural gas company, has announced its financial results for the quarter ended 30th September 2011.
Revenue from the sale of hydrocarbons increased to AED 645 million, with gross profit of AED 315 million. These figures represent increases of 58% and 76% respectively, compared to the same period last year. This is due to an aggregate 20% growth in production across the Group coupled with increased oil prices. Production in the Kurdistan Region of Iraq increased compared to 3Q 2010 as a result of both trains of the gas plant at the Khor Mor Field being in operation to cater for increased demand for gas from the power stations at Erbil and Suleymania.
The Company made a Net Profit after tax of AED 143 million in the third quarter, which compares to AED 33 million in 3Q 2010. This increase in profitability reflects increased production volumes and the fact that an increased proportion of the Group’s sales are from petroleum liquids whose prices have risen significantly since the same period in 2010.
Earnings before interest, tax, depreciation, amortization and exploration (EBITDAX) for 3Q 2011 were AED 366 million, a 41% increase compared 3Q 2010. The revenue collections attributable to the Group during the quarter were AED 220 million. The Company’s cash balance at 30th September 2011 was AED 418 million, while the trade receivables balance was AED 1,485 million.
In the Kurdistan Region of Iraq, construction and commissioning of the LPG plant and supporting facilities are now complete, and gas is being delivered to the Erbil and Sulaymania power stations at peak rates in excess of 300 million standard cubic feet per day with average production of 296 million standard cubic feet per day of gas, 13,900 barrels per day of condensate, and 240 tons per day of LPG. This equates to 26,400 barrels of oil equivalent per day net to Dana Gas, which owns a 40% interest in the license.
In Egypt, production during 3Q 2011 averaged 40,400 barrels of oil equivalent per day from the Company’s twelve producing fields in the Nile Delta and in Upper Egypt. Production operations in Egypt have continued uninterrupted, notwithstanding the challenging transitional period the country has gone through during the year. Development activities have been prudently scheduled to be self financed from the stream of receivables from the Egyptian assets, with the result that production has not risen as forecast at the beginning of the year. The Company will be continuing its exploration program in the last quarter of 2011 and during 2012 in pursuit of continued reserves growth.
Dana Gas is collaborating with a number of international banks for collective advice on financial strategy, capital structure, refinancing the Company’s $1 billion Sukuk, and for developing further the Group’s plans to list its upstream business on the London Stock Exchange. The Company also has appointed international law firms as legal advisors as well as other international expert consultants to advise and represent the Company on various matters related to the planned listing process.
Commenting on the quarterly performance, Dana Gas Chief Executive Officer, Mr. Ahmed Al Arbeed, said: “Dana Gas continues to deliver strong performance and increases in profits driven by our successful operations, in spite of a globally challenging environment. We have and will continue to respond to challenges successfully and with confidence, ensuring that we maintain our operations uninterrupted while we manage our expenditures prudently. As a regional company committed to the long term benefit of our region and its stakeholders, we are committed to operating our assets with a view to creating sustainable value for our shareholders.”
Oct 23 2011
Dana Gas, the Middle East’s first and largest regional private sector Natural Gas Company is participating at The World Economic Forum (WEF), which opened on the 21st of October in Jordan.
The UAE-based Company’s participation takes place alongside other major international companies across a range of sectors including infrastructure, healthcare, information technology, telecommunications, energy, tourism and urban development.
The focus of this year’s forum is on economic growth and job-creation in the Arab World, in light of the challenges related to resource scarcity and increased demand for water, energy and food.
Dana Gas is participating in the World Economic Forum as its vision aligns to the key focus areas of the forum, following previous participations with a senior level delegation that included Mr. Hamid Jafar, Chairman of the Board of Dana Gas.
Mr. Ahmed Al Arbeed, Dana Gas’ Chief Executive Officer, confirmed that the outlook for the region remains promising, despite the political instability experienced since the beginning of the current year.
“Dana Gas continues to achieve strong production growth in its operations and we intend to sustain the momentum we have achieved despite the challenges faced in the region recently and we are committed to continuing our exploration and development programs in the UAE, Egypt and the Kurdistan Region of Iraq.,” added Al Arbeed.
Referring to Dana Gas’ ambition to expand its operations within the region, Al Arbeed said: “We are a growing company and we continue to actively seek new opportunities throughout the Middle East and North Africa region in order to diversify and strengthen our portfolio and continue creating jobs in the Arab World.
Oct 23 2011
Dana Gas wishes to clarify that, although the Company has reviewed opportunities in Syria last year, it is currently not involved in any discussions with the Syrian authorities nor has signed any contracts or agreements.
Sep 28 2011
Dana Gas, the Middle East’s first and largest regional private sector natural gas company, is participating in and sponsoring the 2nd Middle East Prospect Exhibition (MEPEX), being held under the patronage of H. E. Dr Abdul Husain bin Ali Mirza, Bahrain’s Minister of Oil and Gas Affairs, and Chairman of the National Oil and Gas Authority (NOGA).
MEPEX, which runs in parallel with the Middle East Oil Show & Conference (MEOS), the largest and best attended technical event of its kind in the region, is being held in Bahrain from 26 to 28 September 2011. Following its successful inauguration last year, which Dana Gas has also sponsored, MEPEX brings together E&P companies and energy capital under one roof, creating a pure marketplace to establish strategic alliances for initiating and doing business deals. The regionally focused event is attended by hundreds of exhibitors and professionals in the oil and gas industry.
In his opening speech at MEPEX, Dana Gas CEO, Ahmed Al Arbeed emphasized the importance of better resources management that leads to more prosperity.
Citing the fact that the Middle East holds 45% of the world’s natural gas reserves, he said, the region still needs to continue its investment in significantly increasing its gas reserves and production.
Al Arbeed said: “Industry estimates show gas demand in the Middle East has been rising by about 7% per year, outpacing the growth in regional gas production. Moreover, while the region sits on roughly half of the world’s proved reserves of gas, it only provides 19% of the global gas supply.”
Dr. Mohamed Nour Eldin El Tahir, Legal Counsel & Corporate Secretary, Dana Gas, also gave a speech on the recent MENA political events, and the legal risks and challenges these events pose to regional oil and gas companies.
Dr. El Tahir highlighted the challenges posed by constitutional changes, legislative developments, and issues related to the form of governments under the new regime and their impact on existing oil and gas agreements.
MEPEX provides an excellent avenue for the buying, selling and trading of oil and gas prospects and producing properties. And Dana Gas, being the Middle East’s leading private sector natural gas company, is committed to promoting and supporting initiatives and events such as MEPEX through participation and sponsorship.
Aug 10 2011
- Revenue increases 46% compared to 2Q 2010
- Production increases 20% compared to 2Q 2010
Dana Gas PJSC, the Middle East’s largest regional private sector natural gas company, has announced its financial results for quarter ended 30th June 2011, with a Net Profit after tax of AED 124 million, a 276% increase compared to the second quarter of 2010.
Results for 3 Months ended 30th June 2011
Revenue from the sale of hydrocarbons increased to AED 627 million, with gross profit reaching AED 341 million. These figures represent increases of 46% and 90% respectively, compared to the same period last year. This is due to strong production growth coupled with higher market prices for oil, condensate and LPG during 2011. Production increased in aggregate by 20%, from the Company’s operations in Egypt and in the Kurdistan Region of Iraq, where production from the Khor Mor field continues to increase.
Earnings before interest, tax, depreciation, amortization and exploration (EBITDAX) increased by 63% to AED 411 million as compared to the second quarter of last year.
Results for 6 Months ended 30th June 2011
The Net Profit for the 6 months ended 30 June 2011 was AED 216 million compared to AED 66 million in the same period last year. The above Net Profit for the six months excludes an unrealized gain of AED 172 million on the Company’s investment in MOL (the Hungarian oil and gas company, one of our partners in the Kurdistan Region of Iraq), booked directly to equity in line with the Company’s published accounting policy. EBITDAX for the six month period increased to AED 814 million compared to AED 480 million in the same period last year.
Dana Gas Egypt’s operations have continued to deliver strong results producing 4.0 million barrels of oil equivalent during the second quarter, an increase of 6% compared to the same period last year. During the period Dana Gas announced a new discovery at South Abu El Naga-2 in the West El Manzala Concession, which increased the estimated reserves by more than 60 billion cubic feet of gas. Importantly, this new pool will begin contributing to production by the end of 2011.The Company has continued work to optimize the development of the South Abu el Naga discovery and its discoveries in the Salma and Tulip area of its Nile Delta Concessions and now plans to expand the existing El Wastani gas processing plant, a more cost effective solution than building the previously proposed new plant at the Salma field. The new facilities will also increase recovery of LPG for the entire gas stream passing through the El Wastani Plant.
In the Kurdistan Region of Iraq, Dana Gas, net to its 40% share, produced 1.84 million barrels of oil equivalent of gas, condensate and LPG during the period, an increase of 73% over the same period in 2010. Both trains of the LPG Plant at Khor Mor are now complete and in operational mode. Gas production from Khor Mor is increasing, and is now exceeding 300 million standard cubic feet of gas per day, as demand from the power stations increases and as new customers in the region are established.
In our Sharjah Western Offshore Concession an independent assessment of the reserves of the Zora field is close to completion. An invitation to tender for the fabrication and installation of the offshore platform has been issued and once all the contractual arrangements are completed the project construction phase will commence. The total development cost of this field is estimated to be AED 450-550 million ($125-150 million).
As stated recently Dana Gas continues discussions with the appropriate authorities to expedite payments of its overdue receivables in Egypt, and likewise in the Kurdistan Region of Iraq. Collection of receivables improved during the second quarter of 2011 compared to the first quarter. Dana Gas collected approximately AED 210 million ($57 million) in revenues during the second quarter, AED 130 million ($35 million) from Egypt and AED 80 million ($22 million) from the Kurdistan Region of Iraq. The Company seeks to manage its capital expenditure in line with cash generation and is maintaining tight control of its costs, with total capital expenditure for the second quarter of 2011 being AED 106 million ($29 million), a 31% reduction compared to the same period in 2010. Dana Gas’ cash position remains strong with a balance at 30 June 2011 of AED 400 million ($109 million).
Dana Gas’ $1 billion Sukuk is maturing in October 2012 and the Company is working to implement a Sukuk Liability Management Programme with regard to this bond. Dana Gas continues to assess various options for its optimum capital structure and will update the market when appropriate.
The Company still holds its 3% interest in MOL, the Hungarian Oil and Gas Company, the value of this holding remains significantly higher than when it was first acquired in May 2009.
Commenting on the performance, Dana Gas Chief Executive Officer, Mr. Ahmed Al Arbeed, said: “I am very pleased to report that Dana Gas’ Net Profits are up by an impressive 276% compared to the second quarter of 2010. This excellent outcome is driven by the 20% increase in production from Egypt and the Kurdistan Region of Iraq and consequent increase in revenues accompanied by our tight control of costs throughout the organization.”
“Whilst Dana Gas continues to deliver consistent strong operational and financial results, we are working diligently to meet the challenges that we face during the political changes in our region and at the same time we seek to take advantage of opportunities as they arise.” said Mr. Al Arbeed.
Note: For logistical reasons Dana Gas will not be hosting a conference call for these 2nd quarter results, however written questions are invited which should be sent to dg.investorrelations@Danagas.ae. The financial statements and further statistical information is available on the Dana Gas website: www.danagas.com
May 12 2011
- Revenue up 50% compared to 1Q 2010 and production up 34% compared to 1Q 2010
- 3 Months to March 31st 2011
Dana Gas PJSC, the Middle East’s largest regional private sector natural gas company, has announced its financial results for the quarter ended 31st March 2011, with a Net Profit after tax of AED 92 million, a 180% increase compared to the first quarter of 2010, and a 56% increase compared to the last quarter of 2010.
Revenue from the sale of hydrocarbons increased to AED 616 million, with gross profit reaching AED 337 million. These figures represent increases of 50% and 108% respectively, compared to the same period last year. This is due to production growth coupled with higher market prices for oil, condensate and LPG during 2011. Production increased in aggregate by 34%, from the Company’s operations in Egypt, where new discoveries continue to be brought into production, and in the Kurdistan Region of Iraq, where production from the Khor Mor field continues to increase.
Earnings before interest, tax, depreciation, amortization and exploration (EBITDAX) increased by 77% to AED 403 million as compared to the first quarter of last year.
The above Net Profit after tax excludes an unrealized gain of AED 326 million in the quarter for the Company’s investment in MOL (the Hungarian oil and gas company, one of our partners in the Kurdistan Region of Iraq), booked directly to equity in line with the Company’s published accounting policy. The “Comprehensive Income” for the 3 month period is AED 418 million compared to AED 173 million in same period for 2010.
Dana Gas Egypt’s operations have continued to deliver strong results producing 4.25 million barrels of oil equivalent during the first quarter, an increase of 20% compared to the same period last year, which included production from the Ward Delta and West Ward Delta fields which were brought on stream in March 2011. The Company drilled one unsuccessful exploration well during the period and after the end of the period, on 3rd May, announced a new discovery at South Abu El Naga-2 in the West El Manzala Concession. This well, which was drilled as an appraisal of the previously announced South Abu El Naga Field, successfully appraised this discovery and in addition added a new pool discovery, which is estimated to contain in excess of 60 billion cubic feet of gas.
In the Kurdistan Region of Iraq, Dana Gas, net to its 40% share, produced 1.75 million barrels of oil equivalent of gas, condensate and LPG during the period, an increase of 80% over the same period in 2010. Construction of the LPG Plant at Khor Mor is now complete and production of LPG has commenced. Gas production from Khor Mor will increase as demand from the power stations increases and as new customers in the region are established.
Commenting on the quarterly performance, Dana Gas Chief Executive Officer, Mr. Ahmed Al Arbeed, said: “I am delighted to report that Dana Gas’ Net Profits are up by 180% compared to the first quarter of 2010. This outcome is driven by the 34% increase in production from Egypt and the Kurdistan Region of Iraq.”
“Dana Gas’ impressive exploration performance in Egypt continues with our twenty second discovery in the Nile Delta, of which we are particularly proud as we have continued our operations uninterrupted throughout the changes to the Egyptian political landscape. Furthermore, with the successful completion of our gas processing plant in the Kurdistan Region of Iraq, we continue to demonstrate the depth of our operational excellence, and we are now producing gas, condensate and LPG” said Mr. Al Arbeed.
Note: Dana Gas will be hosting a conference call to review these results at 2pm UAE time on Thursday 12th May 2011. Details are on the Dana Gas website: www.danagas.ae
Sharjah – 3 May 2011
Dana Gas PJSC, the Middle East’s first and largest regional private sector Natural gas
Company has announced its latest gas discovery in the Nile Delta, Egypt.
The ‘South Abu El Naga-2’ well, drilled as an appraisal of the previously announced
South Abu El Naga Field in the West El Manzala Concession encountered 16.6 meters
of net pay in the Abu Madi formation, thus extending the field. In addition, the well
encountered 4.8 meters of net pay in a good quality sandstone reservoir of the El
Wastani formation, representing a new pool discovery. On test, the well produced 14.1
million standard cubic feet per day (MMscfpd) of gas with 718 barrels of condensate
from the Abu Madi Formation, and 5.9 MMscfpd of dry gas from the El Wastani
The discovery comes after the announcement of the previous South Abu El Naga-1ST
discovery in September 2010, where the calculated reserves estimate is in the range
of 50 to 90 billion standard cubic feet (Bcf) of gas, with associated condensate
reserves between 1 and 2 million barrels. The Abu Madi development is still expected
to be routed to the planned Salma Delta gas plant, currently being designed.
A preliminary estimate of the discovered reserves in the new pool (El Wastani
formation) is in excess of 60 Bcf of gas, with a possible upside still under evaluation.
Dana Gas is preparing a separate development plan for this new pool, which will
include several appraisal and development wells. The South Abu El Naga-2 dry gas
discovery is expected to be tied in to the Company’s nearby South El Manzala gas
processing plant before the end of 2011. Spare capacity is available in the plant.
Mr. Ahmed Al Arbeed, Dana Gas CEO said, “As our first discovery for 2011, the South
Abu El Naga-2 well highlights our ongoing success in Egypt. Besides being a
successful appraisal of the South Abu El Naga Field, it is the twenty-second new pool
discovery as a result of the outstanding dedication of our exploration and drilling team
in implementing the aggressive campaign launched in 2007. We will actively continue
this exploration program throughout 2011.”
Dr. Hany Elsharkawi, Dana Gas Egypt President commented, “The well is an excellent
start for 2011. We still have a sizeable portfolio of drillable prospects and our
exploration activity will continue throughout the year, as will our development activities.
The discovery at the South Abu El Naga-2 well represents a new era of shallow wells
that can be drilled at low cost with fast production to meet Egypt’s gas production
Dana Gas is currently the 6th highest gas producer in Egypt, a country whose gas
reserves has doubled in the past 5 years to over 70 trillion cubic feet, and now
produces more gas than oil and is already among the world’s top ten exporters of
LNG. In 2007 Dana Gas made Southern Egypt’s historic first ever commercial oil
discovery from its first exploration well drilled in the Komombo Concession. The
Company is firmly committed to pursuing further gas investments, in partnership with
the national Egyptian companies and other energy companies from the region and
Jan 31 2011
- Net profit increases from AED 88 million to AED 158 million
- LPG production commences in Kurdistan Region of Iraq
- Production increases by 31%
Results for the year ended 31 December 2010
Dana Gas PJSC, the Middle East’s largest regional private sector natural gas company, has announced its preliminary financial results for the year ended 31st December 2010.
Revenue from the sale of hydrocarbons increased to AED 1,785 million, with gross profit reaching AED 781 million. These figures represent increases of 40% and 79% respectively, compared to 2009 and reflect the Company’s continued production growth in Egypt and from the Khor Mor field in the Kurdistan Region of Iraq.
Earnings before interest, tax, depreciation, amortization and exploration (EBITDAX) was AED 1,034 million. In 2009 EBITDAX was AED 1440 million due to a one-off gain reported in 2009 from the sale of a 10% interest in the Kurdistan Region of Iraq assets.
The resulting full year net profit for Dana Gas in 2010 was AED 158 million compared to AED 88 million in 2009, an 80% increase which reflects growing production and higher oil prices especially in the fourth quarter of 2010.
The above Income Statement results exclude an unrealized gain of AED 118 million during 2010 on the Company’s investment in MOL (the Hungarian oil and gas company, who are one of our partners in Kurdistan), booked directly to equity in line with the Company’s published accounting policy. This gain for 2010 comes on top of an unrealized gain during 2009 of AED 370 million.
The “Total Comprehensive Income” for 2010 is AED 276 million.
The U.K. based engineering and advisory firm, Gaffney, Cline & Associates have carried out an independent evaluation of Dana Gas Egypt’s hydrocarbon reserves as at 31 December 2010. Following this review, the Company’s gross proved reserves (1P) are estimated to be 89 milions of barrels of oil equivalent (“MMBOE”) (in 2009: 47 MMBOE). The gross proved and probable reserves (2P) are estimated to be 152 MMBOE (in 2009: 132 MMBOE). The gross proved, probable and possible reserves (3P) are estimated to be 253 MMBOE (in 2009: 222 MMBOE).
The 2P reserves results give a total reserves addition of 15% (after 2010 production) and 27% (before 2010 production). The total production replacement ratio associated with this 2P reserves increase is 229%.
During 2010, Dana Gas Egypt produced gas, LPG ,condensate and crude oil at an average rate of just over 42,300 barrels of oil equivalent per day (“boepd”), an increase of over 20% compared to 2009, thanks to production from Dana Gas’ recent gas discoveries that were brought on stream during the year. Additionally in the Kurdistan Region of Iraq, gas and condensate was produced at an average rate, net to Dana Gas’ 40% interest, of 13,200 boepd.
Dana Gas Egypt drilled a total of eleven exploration wells during the year which yielded seven discoveries. The reserves associated with these discoveries are reflected in the year end report from Gaffney, Cline & Associates as discussed above. The Income Statement also reflects the costs that have been written off for dry holes drilled during the year.
Commenting on the performance for 2010, Dana Gas Chief Executive Officer, Mr. Ahmed Al-Arbeed, said: “Dana Gas has continued to make progress in its operations during 2010 and this is reflected in our increasing profits. I am particularly pleased that 2010 has been a year in which we have delivered consistent financial results in every quarter which reflect our strong operational performance, with minimal exceptional items. Our Egypt exploration programme continues to deliver class leading performance, yielding seven discoveries in 2010 resulting in a 2P reserves replacement ratio of 229%.”
“In the Kurdistan Region of Iraq, Dana Gas continues to supply gas to the Erbil and Bazian power stations at increasing rates producing 76% higher volumes in 2010 compared to 2009 which will further increase now that LPG production has commenced from our LPG Plant.” said Mr. Al-Arbeed.
Note: Dana Gas will be hosting a conference call to review these results at 2pm UAE time on
31st January 2011. Full details are on the Dana Gas website – www.danagas.ae
Sharjah 4th Jan 2011
Dana Gas PJSC, the Middle East’s first and largest regional private sector natural gas company, has announced that its annual production rate for 2010 from its Nile Delta Concessions in Egypt is an estimated 42,000 barrels of oil equivalent per day (“boepd”), an increase of 20% on 2009, with production commencing from seven new fields.
In addition, the Company has continued its exploration success during 2010 with seven new field discoveries in the Nile Delta from eleven exploration wells drilled which has led to a 20% increase in reserves, after allowing for 2010 production, compared to 31 December 2009.
Considering these continued operational successes particularly the discovery of the South Abu El Naga and Salma Delta North fields in September, the Board of Dana Gas has decided to retain its 100% interest in its Nile Delta Concessions and to continue operating them to maximize ultimate benefit for its shareholders rather than proceeding with the proposed farmout.
Dana Gas has now embarked on a new phase of production growth, upgrading existing plants and building new capacity to bring these new fields online as quickly as possible. The planned new gas processing plant to the East of the Nile River will be designed to process 120 million standard cubic feet per day (mmscfpd), a considerable increase compared to the original planned design of 50 mmscfpd, which will contribute significant value as the South Abu El Naga and Salma North discoveries have high liquid content. This, along with an ongoing increase in capacity at its El Wastani Plant, will bring Dana Gas’ total production to some 400 mmscfpd (67,000 boepd excluding liquids) in mid 2012.
The company is also continuing its aggressive exploration campaign with a 14 well programme for 2011; the drilling of first well, Sanabel-1, has commenced targeting the deeper high potential Sidi Salim formation.
On the Komombo Concession in Upper Egypt, Dana Gas along with 50% joint operator Sea Dragon Energy Inc, has produced oil during the year at an average gross production rate of 620 barrels of oil per day (“bopd”) and is currently producing at approximately 800 bopd. Work is ongoing to increase the productivity of the Abu Ballas formation by fracturing with two fractured wells due to be placed on production during January 2011. During 2010, 480 kilometres of 2D seismic was acquired and processed, and the first exploration well, Memphis-1, commenced drilling in December.
Mr Ahmed Al Arbeed, Dana Gas CEO, said “Our ongoing excellent exploration performance, with sixteen discoveries in the Nile Delta over the past three years, combined with our year on year production increase of 20% reinforces our view of the remaining potential of this first class acreage and thus confirms to us that retention of our 100% interest will deliver the maximum value to our shareholders. Our production continues to increase, with current production in the Nile Delta at 246 mmscfpd of gas plus 7350 barrels per day of condensate and LPG, a total of 48,000 barrels of oil equivalent per day. We are targeting similar annual increases in production during 2011 and 2012.
“Our team in Upper Egypt continues to work hard to enhance production from the Al Baraka Field with further development drilling planned in 2011, alongside our exploration programme to test the vast potential of the Komombo Concession.”