DUBAI: Dana Gas, the UAE energy firm, faces delayed payments of $148 million for gas from the Egyptian government which could have an impact on its future investments in the country, Dana's CEO told Reuters on Thursday. "We have a four to five months delayed payments from the Egyptian government which is an amount of $148 million," Ahmed Al-Arbeed told Reuters in a telephone interview. Dana Gas has significant investments in Egypt and said it produced 4.25 million barrels of oil equivalent (BoE) in the country during the first-quarter of this year. "If the payment is not made, this might make us think twice before reinvesting in Egypt but for now we are in talks with the government and we hope the issue will be resolved soon," said Al-Arbeed. He said it was too early to say if the company might consider stopping further investments in Egypt. Dana has significant operations in the UAE, Iraq and Egypt. Dana Gas posted a near three-fold rise in first-quarter net profit on Thursday due to higher prices and increased production, helping it beat analysts' forecasts. The Gulf's only listed natural gas company, posted first-quarter earnings of 92 million dirhams ($25.05 million), compared with 33 million dirhams for the year-ago period, it said in a statement on the Abu Dhabi bourse. Five analysts on average had expected Dana to post a net profit of 57 million dirhams for the first quarter according to a Reuters poll. But some analysts expect that ballooning receivables — money owed to Dana by its customers — could pressure earnings. "While the shares may still outperform today on the headline numbers, the earnings do not fully reflect the reality of the company's operating environment," said a research note from Nomura in Dubai. Dana's price target was cut by 10 percent by research firm AlembicHC in April, which warned that receivables at the gas company were expected to balloon in the short term as the Egyptian government deferred payments. Dana said first-quarter profit excluded an unrealized gain of 326 million dirhams on its investment in Hungary's MOL. Crescent Petroleum and Dana Gas formed a consortium with Austria's OMV and MOL in 2009 that aims to pump enough gas from Iraq's Kurdistan region to kick-start the Nabucco pipeline to Europe via Turkey. "Overall from the shares we have from this deal we have made a gain, the value has more than doubled since 2009," said Al-Arbeed. Higher oil prices and increased production helped boost Dana's first quarter profit. "I would say that 60 percent of the profit comes from production and the remaining is due to the high oil price," he said, adding that the plan is to increase overall production by 25 percent by the end of the year. Oil and gas production for the quarter rose to 6 million BoE, compared with 4.5 million BoE in the year-ago period. Revenue rose 50 percent to 616 million dirhams. In April, Dana said it planned to list its shares in London. Al-Arbeed declined to comment on timing. "We are still studying a number of options, and cannot disclose any more details at this point."
