ABU DHABI: The United Arab Emirates Dana Gas said on Thursday it made a net loss of 79 million dirhams ($21.5) in the third quarter due to exploration write-offs and impairment provisions.
The Abu Dhabi-listed firm posted a net profit of 26 million dirhams in the third quarter of 2008.
Exploration write-offs and impairment provisions, principally in respect of three wells in the Egyptian exploration program, were required totaling 110 million dirhams, Dana said in a statement.
As a result, the company incurred a net loss of 79 million dirhams in the third quarter.
The Gulf s only listed natural gas company made a net profit of 281 million dirhams in the first nine months of the year, up from 85 million dirhams in the same period last year, it said.
Prices were lower this year but it was offset by the increase in production, Dana Gas, chief financial officer James Dewar told Reuters by phone.
Revenues in the third quarter were up 12 percent on a year ago at 359 million dirhams, despite lower oil prices.
In May Dana said it was part of a UAE and European consortium that includes Austria s OMV and Hungary s MOL planning to pump enough gas from Iraq s Kurdistan region to kick-start the estimated $10 billion Nabucco pipeline project to supply Europe.
Oil and gas production increased to 3.8 million barrels of oil equivalent (boe) in the third quarter from 2.5 million boe in the third quarter of 2008, the statement said, adding that the increase in revenue was due to higher production.
The results were negative on impairments but if you exclude that one-off item there would be a profit of 31 million dirhams in the quarter close to our expectations, said Hala Fares, analyst at Shuaa Capital.
Operationally, there are major improvements in the operating profit (up 64 percent) and EBITDAX (up 41 percent), she said.
Growth plans
Dana Gas will pursue growth by investing in its oil and gas projects in Egypt, Kurdistan and Sharjah.
We will continue to invest in exploration in these three places with a significant capex in fourth quarter and next year, Dewar said, declining to give an investment outlay.
We expect our cash position to drop by the end of Q4 as we continue to invest, he said. Dana Gas had cash totaling $239 million at the end of the third quarter.
For 2010-11 the company requires financing to fund its investment plans. We are looking at various options, he said, adding it could include a bond sale.
It already undertakes exploration and production in Egypt, Iraq, Sharjah and Nigeria.
Shares in Dana closed 2.6 percent down in Abu Dhabi on Thursday.
The company had earlier said gross profit had risen 64 percent in the third quarter from a year ago with revenue rising 12 percent, but had not given a breakdown of its financials.
