Dana Gas, the Middle East's largest private-sector natural gas group, revealed its first-quarter financial results for the year ending March 31, 2021, on Sunday.

In Q1 2021, net profit increased by 41% to $24 million (Dhs88 million) from $17 million (Dhs62 million) in Q1 2020. The higher net profit was attributed to higher sales from higher output in the Kurdistan Region of Iraq (KRI) and a lower financing expense due to the reduced borrowings in Q1 2021 as compared to Q1 2020.

Revenue was $106 million (Dhs389 million), a 2% increase from $104 million (Dhs382 million) in Q1 2020.

The increased output was primarily attributed to a 9% surge in production in Iraq's Kurdistan Region. In Q1 2020, the average realized price for condensate was $44/bbl and $33/boe for LPG, in contrast to $41/bbl and $30/boe, respectively.

The company has announced the complete restart of the expansion plan at the Khor Mor area in Iraq's Kurdistan Region.

“Dana Gas has provided a good quarter with strong operating results, maintaining the positive growth from the prior period,” said Dr. Patrick Allman-Ward, CEO of Dana Gas. We are going forward with our development plans in the KRI to substantially increase production from 440 MMscf/d to 690 MMscf/d by April 2023. This would benefit from our top and bottom lines. We remain completely committed to maintaining our generating properties in Egypt for the good of all of our stakeholders, while also concentrating on assessing the promising potential of the offshore Block 6 Concession Area as fast as possible.

“With expanded production from both the KRI and lower borrowing costs following the repayment of the Company's remaining Sukuk in Q4 2020, we retained our good financial position. Amid unfavorable economic circumstances, I am delighted that we have sustained the dividend to shareholders for the fourth straight year.”

In Q1 2021, group output averaged 64,900 boepd, a 2% rise from 63,650 boepd in Q1 2020. The KRI powered the first-quarter production growth, which increased by 9% to 35,300 boepd from 32,400 boepd, expanding on the substantial production increase in Q4 2020 following the completion of the Khor Mor plant by-pass project in July 2020. Egypt's output fell by 5% to 29,050 boepd, but this was more than balanced by a rise in demand in KRI.

Within KRI, Pearl Petroleum, a company consortium led by Dana Gas and Crescent Petroleum, has completed the Khor Mor field expansion project.

The first gas train would provide 250 million cubic feet a day of much-required increased gas output to local power plants. The project construction progress was halted due to the COVID pandemic, but it is now on schedule for a new launch date of April 2023, after an agreement to remove the force majeure.

Pearl would spend an additional $600 million on the KM250 extension initiative, increasing capacity by nearly 60%.

Dana Gas declared last month its intention to keep and run its onshore facilities in Egypt alongside the strongly prospective Block 6. The Company is currently assessing its Block 6 Concession Area in preparation for the drilling of an exploration well as quickly as possible.

The cash and bank balance at the end of Q1 was $149 million (Dhs546mm), up 38% from $108 million (Dhs396mm) at the end of 2020.

During the year, the Company raised $35 million (Dhs128 million) in the KRI, with all receipts due from the KRG are paid in full and on time. The balance of KRI overdue receivables is estimated to be cleared by the third quarter of this year, based on current oil prices. In Egypt, the firm raised $23 million (Dhs84 million) during the first quarter, and its accounts receivable stood at $131 million at the end of the quarter (Dhs480 million).

The Stakeholders accepted a cash dividend for the fourth straight year at the Company's General Assembly on April 28, 2021. This 5.5-cents-per-share dividend will be paid in May.

Dana Gas is the Middle East's first and biggest regional private sector natural gas Company, established in December 2005 and listed on the Abu Dhabi Securities Exchange (ADX).

It has exploration and development properties in Egypt, the Kurdistan Region of Iraq, and the UAE, with 2P reserves surpassing one billion boe and 2020 average production of 63,200 boepd. Dana Gas is an important player in the Middle East, North Africa, and South Asia (Menasa) region's rapidly rising natural gas market, with significant reserves in Egypt, KRI, and the UAE, and future growth plans.