By: Oil and gas Middle East

Dana Gas reported a 47% year-on-year increase in net profit to AED393 million ($107 million) for the first half of 2026, supported by higher production in Egypt, stronger hydrocarbon prices and increased gas sales.

Revenue rose by 51% to AED946 million ($258 million), compared with AED627 million ($171 million) during the same period in 2025.

The results included a one-off gas metering reconciliation of AED176 million ($48 million), recognised during the first quarter.

Excluding that item, first-half net profit stood at AED217 million ($59 million), while revenue increased by AED143 million ($39 million) year on year.

Second-quarter net profit rose by 10% to AED123 million ($33 million), compared with AED112 million ($30 million) in the second quarter of 2025.

Dana Gas said profitability was affected by a higher cost base following completion of the KM250 expansion, including additional operating, depreciation and finance costs, as well as temporary production disruption.

The company expects these pressures to ease as utilisation of the expanded processing capacity increases.

“Our results show the resilience of the business. We managed to increase production and recorded higher net profit despite the regional security situation affecting utilisation of our expanded processing capacity in the KRI,” said Richard Hall, Chief Executive Officer of Dana Gas.

Hall said field employees in the Kurdistan Region of Iraq (KRI) had continued operating under difficult conditions, while the Khor Mor plant remained reliable throughout the disruption.

He added that Dana Gas was one of the few operators to maintain production during the period, supporting continued gas supply for electricity generation.

The company is also continuing discussions with the Kurdistan Regional Government over collections, which Hall said would be important for supporting future investment.

Following the reporting period, Dana Gas and Crescent Petroleum also began supplying gas from Khor Mor to Iraq’s Ministry of Electricity.

Under the agreement, 100 million standard cubic feet per day will be supplied to the Kirkuk Taza power station for an initial period of one year.

Hall said the agreement marked an important step in realising the benefits of the KM250 expansion and would support further energy co-operation within Iraq.

Egypt growth offsets KRI disruption

Production in Egypt increased year on year for the second consecutive quarter, supported by Dana Gas’ ongoing investment and drilling programme.

The company drilled three new wells and re-completed one well during the first half.

Two exploration wells were completed during the period, while another well identified an estimated 10 billion cubic feet of gas resources, significantly above the original estimate of 3 billion cubic feet.

Dana Gas said the discovery could also support a further 12 billion cubic feet of future gas resources across the licence area once developed.

The company plans to drill another four wells before the end of 2026.

Production in Egypt averaged 13,300 barrels of oil equivalent per day during the first half, up 7% from 12,450 barrels per day during the same period in 2025.

Payment performance in Egypt also improved, with all overdue receivables settled and subsequent payments continuing in full and on time.

Hall said this had increased the company’s confidence to continue investing in the country.

Across the group, production averaged 52,900 barrels of oil equivalent per day during the first half, broadly in line with 52,750 barrels per day a year earlier.

Higher output in Egypt helped offset intermittent operations in the KRI.

Production in the KRI averaged 39,600 barrels of oil equivalent per day, down 2% from 40,300 barrels per day during the corresponding period in 2025.

Khor Mor began the year at record production levels, with output exceeding 700 million standard cubic feet per day and group production reaching 70,000 barrels of oil equivalent per day.

However, security-related disruption led to temporary suspensions and lower utilisation during the period, limiting the contribution from the KM250 expansion.

Following renewed regional escalation in July, Dana Gas introduced precautionary measures at Khor Mor.

Operations have since resumed and production has normalised following updated security assessments and assurances from the Kurdistan Regional Government and the Government of Iraq.

At Chemchemal, development work continued under a $160 million appraisal and early development programme.

Long-term gas sales agreements are already in place to supply up to 142 million standard cubic feet per day to industrial customers in the KRI.

Dana Gas’ liquidity also strengthened during the period.

Its consolidated cash balance increased to AED843 million ($230 million) at the end of June, compared with AED638 million ($174 million) a year earlier.

Total collections reached AED616 million ($168 million), comprising AED381 million ($104 million) from the KRI and AED235 million ($64 million) from Egypt.

The company also fully drew down an AED275 million ($75 million) bank facility secured earlier in the year, increasing available liquidity and financial flexibility.

Dana Gas completed payment of its 2025 dividend of 6.5 fils per share during the period, representing a total cash distribution of AED455 million ($124 million) to shareholders.