Rising gas prices in North America also helped lift Abu Dhabi company's profit to Dh274 million in the first quarter.
Taqa profits double in Q1 as UK North Sea oil output improves
Abu Dhabi National Energy Company’s net profit more than doubled in the first quarter of the year thanks to rising North American gas prices and a recovery in UK North Sea output.
The company, also known as Taqa, announced profits of Dh274 million for the quarter, compared with Dh106m a year earlier. Revenues rose by 34 per cent to Dh7.26 billion for the quarter, buoyed by a 65 per cent increase in oil and gas revenues during the period.
Hydrocarbon production across Taqa’s North Sea assets more than doubled to 62,900 barrels of oil equivalent per day during the quarter. Full capacity production was restored at the company’s Cormorant Alpha platform in August after it had been suspended in January last year because of a leak.
Oil and gas production in North America was stable despite the lower capital expenditure environment, while net realised prices were up by 22 per cent.
“Our first-quarter result was helped by the restoration of North Sea oil production at Cormorant Alpha and higher natural gas prices in North America, but we also demonstrated our ability to increase capital efficiency and control costs,” said Taqa’s chief financial officer, Stephen Kersley.
“We are well positioned with ample liquidity and look forward to driving continued improvement in earnings and coverage ratios.”
Leadership changed at Taqa during the first months of this year after the company posted a difficult set of results last year.
The company suffered a net loss of Dh2.52bn for last year because of the writedown of US$884m on its Canadian gas assets, owing to a drop in gas prices in North America.
So far the chief executive, Carl Sheldon, and the executive vice chairman, Abdulla Al Nuaimi, have departed this year. Mr Sheldon’s responsibilities were assumed by Edward LaFehr, formerly the head of Taqa’s operations in North America, who was appointed as chief operating officer in April.
Mr LaFehr said yesterday that the company would be pursuing “a more selective growth agenda” alongside its emphasis on safety, operational excellence and profitability going forward.
Taqa acquired a 51 per cent stake in two hydroelectric plants in the northern Indian state of Himachal Pradesh from Jaiprakash Power Ventures during the first quarter of the year.
The plants have a combined power generation capacity of 1,391 megawatts. Taqa is expected to complete the acquisition at the end of the year.
Taqa also reported progress in its Moroccan operations, with the first of two new 350 megawatt units at the Jorf Lasfar power station commissioned last month. The plant’s second unit is expected to be commissioned in June and will expand the facility’s output to 2,056MW.
The company last month commenced preliminary commercial operations at its Bergermeer gas storage facility in the Netherlands. The facility will become the largest third party access gas storage facility in Europe when it is completed next year.
Taqa has sold all of the facility’s long-term capacity and plans to auction the remaining short-term capacity in September.
Last month the company followed in the footsteps of Aldar Properties with the refinancing of a US$1.2bn bond due to mature in September. This was achieved through a combination of a $200m Samurai loan, a €180m private placement and a $750m 10-year bond.
Taqa shares, listed on the Abu Dhabi Securities Exchange, closed down 0.78 per cent at Dh1.27.
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