Dana Gas, the Sharjah energy producer, said average gas production rose 6 per cent in the first quarter, led by the Kurdistan region of Iraq after increasing capacity at the Khor Mor field in October.
Production increased to 68,700 barrels of oil equivalent per day (boepd) from 65,000 boepd in the same quarter last year, Dana Gas said in a statement to the Abu Dhabi stock exchange on Wednesday, where its shares are traded. The production rise is expected to boost revenues.
"We expect this increase in production to have a positive impact on the company’s revenues since we are now realising gas sales in the KRI and we will be benefiting from the steady increase in oil prices since Q4 2018," said Patrick Allman-Ward, chief executive of Dana Gas.
The company expects to generate up to $200 million (Dh733m) in revenues following its latest gas sales agreement in March with the Kurdistan Regional Government, as it looks to add more capacity to its assets in the region. Dana Gas and Crescent Petroleum, its partner in the Pearl Consortium, operate the Khor Mor and Chemchemal fields in the Kurdish region.
The partners announced the intention to invest $700m as part of a sales agreement and expansion for the gas assets. As part of the 20-year gas sales agreement with the KRG, the two parties will boost gas production by 63 per cent, or 250 million standard cubic feet per day, to 650 million scf/d by 2021, and later to 900 million scf/d by 2022. Production of condensate from the assets is expected to reach 35,000 bpd by 2022.
Dana Gas, which operates in Iraqi Kurdistan and Egypt, swung to a net loss for the full year 2018 as impairments on ageing assets in Egypt and the UAE bit into profitability. The company reported a loss of $186m (Dh681m) for the 12-month period ending December 31 , compared with a net profit of $83m recorded at the end of 2017.