EPS figures calculated from Net Profit / 5,910,000,000 shares outstanding. DANA share price as of 01 Feb 2009 was 0.55 dhs, so 2008 estimated PE is about 0.55 / 0.04 = 13.8, based on Q4 earnings, which sort of looks reasonable but given that stock prices have crashed in recent months, compared to other stocks, that looks rather high, and 2008 PE based on FY earnings is 0.55 / 0.02 = 27.1, which is even more expensive looking.
Although Q4 earnings were better than most other quarters in the past couple of years, Dana Gas has seen little overall growth on a quarterly basis with profits a seemingly random number between AED 20m and 40m for each quarter. Will there be an improvement in 2009? Well, if Dana ever gets that pipeline with Iran sorted out then there might be a noticeable improvement but otherwise, well, there are some reasonable sounding targets listed in the press release for 2009, but not quantified in terms of revenue or earnings.
Dana Gas shares are unchanged at AED 0.55 so far today, on modest turnover.
Financial highlights for Dana Gas (DANA), released during pre-trading session. Press release in next post.
Press Release 01 February 2009 (during trading):
2008 Highlights: Facts & Figures
Financial highlights:
• Revenues of AED 1,139 million, up 10% from 2007.
• EBITDAX (representing cashflow generated from operations) of AED 575 million, an increase of 20% on 2007.
• Net Profit of AED 120 million a bottom line growth of 8% from 2007, after non-cash charges of AED 301 million on account of depreciation and depletion, AED 263 million pertaining to finance cost and AED 138 million against tax expenditure.
• Long term assets increased 13.4% from AED 8.2 billion in December 2007 to AED 9.3 billion in December 2008 (mainly due to AED 1 billion investment (50% share) in the Kurdistan project). Total assets stood at AED 10.8 billion.
• Cash and bank balance at year end stood at AED 789 million.
Business Highlights:
• Group: The gross operated gas production from operations in Egypt and Kurdistan Region of Iraq reached 220 million standard cubic feet per day (mmscfd), totaling more than 40,000 barrels of oil equivalent (boe) per day.
• Kurdistan Region of Iraq: Kurdistan project was completed and started production in a record time of only 15 months through the Early Production Facilities (EPF). It is currently producing at an initial rate of 80 to 90 million cubic feet per day (mmscfd), The EPF will be supplemented by the main LPG plant, with the first train of 150 mmscfd expected to come on stream by end of Q2 2009 and the second train, taking production up to 300 mmscfd, coming on stream in the third quarter of 2009.
• Egypt: Production in Egypt achieved a year end exit rate of 31,640 barrels of oil equivalent (boe) per day and with a total annual production of 10.5 million barrels of oil equivalent (mmboe). Recently the latest discovery was made in West Qantara Concession, Salma-1, which is expected to add up to 230 billion cubic feet of gas reserves. This discovery is in addition to the earlier rich gas discoveries in El Basant-1 and 2 that added 158 billion cubic feet of gas plus condensates, enhancing the Company’s reserves and representing an excellent 362% reserves replacement ratio, based on proved and probable reserves for this year. During the year, the company’s total (3P) petroleum reserves in Egypt increased to 158 mmboe from 86 mmboe in 2007 - an increase of 84% (this has since increased further in early 2009).
• UAE Gas Project: Commissioning of NIOC’s upstream facilities is currently in progress and gas supplies are expected to commence in 2009.
• Sharjah Western offshore concession: In March 2008, the Company was awarded a 25 year Petroleum concession by the Government of Sharjah for the exploration and development of the Sharjah Western Offshore Concession. The company is moving ahead with plans for exploration and development of the Concession.
• UGTC/ Emarat Joint Venture: Completion of the construction of the pipeline with a design capacity of 1,000 mmscfd to transport gas in Sharjah from Sajaa to Hamriyah freezone.
• Investments: The Company made investments during the year of AED 765 million (US$ 210 million) and AED 325 million (US$ 90 million) in respect of Capital expenditure in the Kurdistan Project and Egypt, respectively.
Liquidity and Financial Resources
At 31st December the Group’s Cash and Bank balance stood at AED 789 million and during the year ended the Group generated an EBITDAX of AED 575 million.
The Group has sufficient cash and future cash flows to fund the ongoing expenditures and to service the Sukuk.
Plans for 2009
• Target to increase Company petroleum production by over 70% to 68,000 boepd by year-end.
• Further exploration and growth in Egypt in the upstream and midstream.
• To further expand ‘Dana Gas Cities’ concept in new locations across the region.
• Pursue acquisitions (asset and corporate) and new projects in N. Africa and Gulf Region.
• Fast track development of the Zora Gas Field in Sharjah.
• Start-up of UAE Gas Project. (sweetening plant in Sharjah successfully commissioned and ready to receive the feed gas from the supplier).
• Production increase in Kurdistan region to 300 million standard cubic feet per day.
• New discoveries in Egypt to be brought into production, together with further developmental activities.
• Cash-flow from Operations increases by 20% to AED 575 million
• Net Profit for the year up by 8% during 2008
• Multiple discoveries have doubled Company’s Egypt gas reserves
• Total production increases by over 50% with start up of Kurdistan Project
• Long-term assets grow by 13% with total assets of AED 10.8 billion.
Sharjah – Dana Gas PJSC (DANA), the Middle East’s largest regional private sector natural gas company, has announced preliminary results for the year ended 31 December 2008, posting revenue from oil and gas production of AED 1.14 billion, an increase of 10% over the previous year.
Earnings before Interest, Taxes, Depreciation, and Amortization (EBITDAX) reflecting cash flows from operations in 2008 increased by twenty per cent during the year to reach AED 575 million. Net profit for the year was AED 120 million, an annual increase of 8 percent, after finance charges of AED 263 million, non-cash depreciation and depletion of AED 301 million and income tax expense of AED 138 million during the year. Long-term assets grew by 13.4% during the year to reach AED 9.3 billion, while total assets as at 31 December 2008 stood at AED 10.8 billion, all related to its core business and with no investments or exposure to financial or property markets. At the end of 2008, Dana Gas cash and bank balances stood at AED 789 million, demonstrating a solid liquidity position despite the current financial crisis.
Operationally, Dana Gas’ oil and gas production in Egypt achieved a year end exit rate of 31,640 barrels of oil equivalent (boe) and ended the year with a total production of 10.6 million barrels of oil equivalent (mmboe), while significant new discoveries have more than doubled the Company’s petroleum reserves in the country. In the Kurdistan Region of Iraq, gas production commenced in the fourth quarter at a gross rate of 80 million standard cubic feet per day (MMscfpd), leading to a 50% increase in total operated production for Dana Gas.
“The year 2008 has been an excellent year for Dana Gas and we will continue to build on this important base in 2009, focusing as we always have on our core business area in the natural gas industry, which continues to show extremely strong fundamentals and growth opportunities, especially in our region in the Middle East, despite the slowdown in some other sectors.” said Hamid Jafar, Executive Chairman of Dana Gas. “We are on target to increase our production by over 70% in the coming year, and the majority of our revenues are currently from fixed long-term contracts which also offers some protection from volatile oil prices. We will continue our strategy of making careful and sound investments in this vital strategic industry, to deliver solid growth for our shareholders while benefiting the countries in which we work.”
Ahmed Al-Arbeed, Dana Gas Upstream Executive Director, highlighted some of the key business achievements during the past year: “One of the most notable achievements for the year was the delivery of first gas within a record time of 15 months in our major project in the Kurdistan Region of Iraq with our partner Crescent Petroleum, which resulted in an increase of over 50% in our gross operated volumes. In Egypt, we pursued a successful drilling program which yielded multiple discoveries in different areas of our Egyptian concessions, significantly enhancing the Company’s reserves with 362% reserves replacement, based on proved and probable reserves, for the year. In the UAE, Dana Gas completed its joint venture project with Emarat to own, manage and operate the Middle East’s first common user pipeline and began implementation of the exploration and development programme of the Western Offshore concession in Emirate of Sharjah which includes the development of the Zora Gas field.”
Mr Al-Arbeed continued: “In 2009 we will continue to implement our strategies for growth and expansion, focusing on capturing new opportunities through both acquisition and new project development. This year will Insha’Allah see the long awaited start up of the UAE Gas Project and fast track development of the Zora Gas Field in Sharjah, our production in the Kurdistan Region of Iraq will progressively increase to 300 million standard cubic feet per day, and work to bring our recent new discoveries in Egypt into production. We will also be continuing with further extensive developmental activities in all our projects.”
At year end Dana Gas gross operated gas production from operations in Egypt and Kurdistan Region of Iraq reached 220 MMscfd, with total hydrocarbon production exceeding 40,000 barrels of oil equivalent (boe) per day.
In Egypt, new discoveries have significantly enhanced the Company’s closing reserve position, and these were subject to independent professional evaluation, showing total (3P) reserves growing 82% to 157.7 million barrels of oil equivalent (MMBOE) as at 31 December 2008 (compared with 86.4 MMBOE a year earlier). The Company’s 2P (proven plus probable) reserves replacement ratio was 362%, with 2P reserves addition of 41%.
Dana Gas Finance Director, Neeraj Agrawal, elaborated on the Company’s financial results: “In the current financial and economic climate, Dana Gas has produced results that demonstrate solid growth and this reflects our focus on the strategic and expanding natural gas industry in our region. We successfully raised a billion dollars at the end of 2007 by issue of our convertible sukuk and continue to maintain a healthy liquidity position, with no exposure to the market downturn in real estate or financial investments.”
Mr. Agrawal added, “We entered 2009 with a cash and bank balance of AED 789 million which, along with the cash flow from operations in 2009, will facilitate the funding of our ongoing projects and servicing of the Sukuk.”
In the Kurdistan Region of Iraq, Dana Gas and its partner Crescent Petroleum were able to complete the 180 km gas pipeline to transport gas from the Khor Mor field to the Erbil Power Station in late September. The initial processing facilities were successfully installed with gas deliveries to the Erbil Power Station commencing on 1 October 2008 via the 180 km pipeline. The main LPG plant construction is in progress and the first train is expected to be put into production at 150 MMscfd by end of Q2, 2009 and the second train for an additional 150 MMscfd is forecast to come on stream by Q3 2009.
In Egypt multiple significant discoveries were made in different areas of Dana Gas’ concessions, which significantly increased the size of the Company’s hydrocarbon reserves. The most recent discovery was made in West Qantara Concession, Salma-1, which is expected to add up to 230 billion cubic feet of gas reserves (38 MMBOE) plus condensates. This discovery is in addition to the earlier rich gas discoveries in El Basant-1 and 2 that have added up to 160 billion cubic feet of gas (27 MMBOE) plus condensates. This accumulation is being developed on a fast track basis back to the Company’s existing facilities at El Wastani and will be commencing production during the first half of 2009.
The UAE Gas Project to process and transport imported gas is now in its final stages of completion. The construction and interconnection of the Company’s facilities in the UAE have long been successfully completed and are awaiting the commencement of gas supplies. The ultimate supplier of gas, NIOC, has completed the installation of all the main components of the required upstream facilities in Iran. Commissioning of these upstream facilities is currently in progress for the commencement of gas supplies upon completion.
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