Dana Gas annual revenues grow to Dh1.14 billion

Sharjah, February 2, 2009 (WAM) - Dana Gas PJSC has announced preliminary results for the year ended 31 December 2008, posting revenue from oil and gas production of Dh1.14 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 Dh575 million. Net profit for the year was Dh120 million, an annual increase of 8 percent, after finance charges of Dh263 million, non-cash depreciation and depletion of Dh301 million and income tax expense of Dh138 million during the year. Long-term assets grew by 13.4% during the year to reach Dh9.3 billion, while total assets as at 31 December 2008 stood at Dh10.8 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 Dh789 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," he added.

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," he said.

"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," he explained.

"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," he further explained.

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%.