Dana Gas swings to loss after write-offs on Egyptian assets

Dana Gas, the Gulf's only publicly listed natural gas company, has swung to a fourth-quarter net loss after writing off the value of some of its assets in Egypt. The Sharjah company lost Dh193 million (US$52.5m) in the final three months of last year, compared with a Dh35m net profit for the fourth quarter of 2008. Dana posted a Dh79m net loss for the third quarter. But James Dewar, its chief financial officer, predicted a return to profitability this quarter.

"We are entering the first quarter with confidence," Mr Dewar told Reuters. "I expect Dana Gas to be delivering net profit - in Q1." Dana posted a full-year profit of Dh88m, down 36 per cent from Dh120m in 2008, despite a 12 per cent increase in revenues to Dh1.28 billion. The company said the results excluded a one-off unrealised gain of Dh370m last year for its investment in the Hungarian petroleum group MOL, which was booked directly to equity.

Dr Hany el Sharkawi, the president of Dana's Egyptian unit, said the fourth-quarter write-offs were mainly related to unsuccessful exploration wells. But Dr el Sharkawi said he was "encouraged" by the company's eight medium-sized gas discoveries in Egypt last year. Last year, Dana spent about $170m on oil and gas exploration in Egypt, and would spend at least that amount this year to drill between 15 and 18 new exploration wells, Dr el Sharkawi said.

Dana is targeting a 15 per cent rise in Egyptian oil and gas output this year to an average of about 40,000 barrels of oil equivalent per day (boepd) from 34,700 boepd last year. It was pumping 40,200 boepd from Egypt at the end of last year. Dana stock closed at Dh0.90 yesterday on the Abu Dhabi Securities Exchange, down 1.1 per cent. @Email:tcarlisle@thenational.ae