Dana Gas has received a one-off dividend payment of $42 million (Dh154m) from consortium Pearl Petroleum for its operations in the Kurdistan Region of Iraq (KRI). The payment follows the release of an additional $120m out of the $400m that was paid by the Kurdistan Regional Government (KRG) to the five-member consortium – in which the Sharjah company controls a 35 per cent stake – under a settlement reached in August 2017, the company said in a bourse filing to the Abu Dhabi Securities Exchange, where its shares trade. The dividend payment, which comes in addition to the regular dividends from operational cash flows, brings total dividend received by Dana Gas from the KRI this year to $121m, in line with the payments made in 2018, it said. “Collecting the payments from sales of gas and liquids on time and receiving these dividends provide us and our partners with the confidence to push forward with our expansion plans,” said Patrick Allman-Ward, chief executive of Dana Gas, the Middle East’s largest private sector natural gas company. The company, which is looking to expand its operations, has several exploration and production assets in the UAE, Egypt and KRI. With this latest cash boost, Dana aims to "soon move forward with the construction phase for the next 250 mcf/d [million standard cubic feet per day] gas train" that will raise its local power generation capacity, said Mr Allman-Ward. This will ultimately increase production by more than 60 per cent when fully operational in 2022, and is expected to add “between $175m and $200m annually to our top line”, he added. Pearl Petroleum is boosting production in the KRI, where 25 per cent of the region's power needs remain unmet and demand is expected to outstrip supply in the medium and long-term. Dana Gas operates gasfields in the KRI, supporting three quarters of the area's electricity production. The company signed a 20-year gas sale agreement with the KRG earlier this year to facilitate the production and sale of an additional 250 mscf/d of gas. Dana Gas reported an 87 per cent year-on-year drop in its third-quarter net profit to Dh8m. Quarterly net profit was hurt by impairment charges of Dh220m on the Merak-1 well in Egypt, which proved to be commercially unviable, it said in an earlier stock market statement. Excluding one-offs, Dana Gas reported flat net profit and revenue of Dh61m and Dh422m, respectively. However, the company's net profit for nine months more than trebled to Dh521m, largely on the back of Dh462m accrued from "recognition of financial assets related to certain reserve-based earn-out and other entitlements", the company said.
