Dana Gas, the Sharjah producer, has nearly tripled its first-quarter profit thanks to sharply higher output from Egypt and Iraqi Kurdistan.
But the private-sector company, which lists its stock in Abu Dhabi, is still awaiting payment for much of the gas and liquids it pumped in the first three months of the year.
Yesterday, Dana posted net income of Dh92 million (US$25m) for January to March this year, an increase of 180 per cent on the first quarter of last year. Revenue rose 50 per cent to Dh616m.
"This outcome is driven by [a] 34 per cent increase in production from Egypt and the Kurdistan region of Iraq," said Ahmed al Arbeed, the chief executive of Dana.
A string of gas and condensate discoveries in Egypt's Nile Delta since 2007 has bolstered Dana's reserves as the company has expanded its output from the region that generates the bulk of its revenue. This month, Dana announced its 22nd Egyptian gas strike.
The company said it produced 4.25 million barrels of oil equivalent (boe) from Egypt during the first quarter, up 20 per cent from the comparable period last year.
"We have continued our operations uninterrupted throughout the changes to the Egyptian political landscape," Mr al Arbeed said.
But after three changes of energy minister since the former president Hosni Mubarak was ousted in February, most payments due to Dana are about four months behind schedule. The company's receivables from Cairo climbed to $148m in the first quarter, from $98m in the same period last year.
As a result, Dana is planning to defer its costlier drilling and construction projects in the country as far as possible. It will drill just enough this year to meet contractual deadlines, said Donald Dorn-Lopez, the company's technical director.
In Kurdistan, Dana is owed another $156m for refundable development costs, up from $115m in receivables from the regional government a year earlier.
"We have not yet been paid," Mr al Arbeed said. "We don't know how much they will transfer, but we are still waiting to hear."
Dana and its partners in Kurdistan - Crescent Petroleum, OMV and MOL - have recently completed a gas processing plant, enabling them to produce a sales stream of liquid petroleum gas (LPG). Previously the group supplied natural gas free to local power plants, stripping out only condensate, a type of light oil, for separate sale.
Dana's 40 per cent share of gas, LPG and condensate produced from the Khor Mor field in Kurdistan totalled 1.75 million boe in the most recent quarter, an 80 per cent increase on the same period last year. The more gas the group pumps, the more liquids it can sell.
"Gas production from Khor Mor will increase as demand from the power stations increases and as new customers in the region are established," Dana predicted.
But the delays in government payments could become a serious concern if they continue for many more months. The company must refinance about $1 billion of Islamic debt that matures next year. Dana stock gained 1.4 per cent to close at 69 fils yesterday.