TAQA Reports Q1 Results, Cites Significant Rise in O&G Production

Abu Dhabi National Energy Company PJSC, a publicly listed company on the Abu Dhabi Securities Exchange, reported financial results for the first quarter of 2009.

Key Highlights

Total revenue reached AED 4.2 billion compared with AED 4.0 billion for the same period in 2008, an increase of 5%.

Revenue from the electricity and water business, excluding supplemental fuel, increased by 14% to AED 1.4 billion, from AED 1.2 billion for the same period in 2008. This was primarily due to the expansion of Taweelah B and revenue from the Red Oak toll acquired in December 2008.

Revenue from oil and gas activities (including gas storage) reached AED 1.8 billion, compared with AED 2.1 billion for the same period in 2008 as a result of lower net realized oil and gas prices.

• Net profit, after minority interests, for the quarter was AED 40 million compared with AED 398 million in the same quarter in 2008. The decrease in net profit for the quarter is mainly attributable to the decrease in realized oil and gas prices during the period and lower foreign exchange rates
• EBITDA was AED 1.9 billion for the first quarter of 2009, versus EBITDA of AED 2.3 billion in the same period in 2008. This translates to an EBITDA margin of 45%.
• Basic earnings per share were 0.6 fils for the quarter, compared to 9.6 fils for the same period in 2008.
• Total assets as at March 31, 2009 were AED 87.0 billion.

Peter Barker-Homek, Chief Executive Officer of TAQA, said, "There is little doubt that the first quarter of 2009 has been a one of the most challenging to-date, for both TAQA and the global economy. However, despite difficult conditions in global energy markets, which have seen the price of oil hit lows of $41.15 per barrel in February 2009, the results I present today are once again a clear endorsement of TAQA’s diversification strategy and proven management team. They also support our long-term objective of building a distributed asset base in North America, Europe and the Middle East.

"We remain committed to rigorous and disciplined cost control and to ensure that as production and net capacity increases, so too do efficiencies across the group.

"As I look out into 2009, I take pride in the strength of our position and quality of the team we have built. TAQA remains well funded with no short-term refinancing needs and significant free cash flow to cover existing obligations and fund opportunities for future growth."

Market Overview

During the first quarter of 2009, global energy markets continued to decline sharply, particularly when compared with the first quarter of 2008. This saw the Brent oil price fall from US $96.97 at the end of March 2008 to US $50.56 at the end of the same quarter of 2009.

This position was also reflected in North America, with the WTI crude price falling from US $96.25 to US $51.37. Throughout the quarter, US crude oil inventories continued to rise, which put pressure on prices. The lowest point was reached in February 2009, but there has been a steady recovery in recent weeks.

The US dollar also strengthened against the Canadian dollar from CDN$1.02 / US$1 on March 31, 2008 to CDN$1.26 / US$1 on March 31, 2009, reaching a high of CDN$1.29/US$1 on March 9, 2009.

Upstream and Midstream

• Upstream activity generated revenues of AED 1.8 billion (including gas storage and other revenue), 44% of total revenues and 43% of the total segmental profit.
• Total production was 139.3 thousand barrels of oil equivalent per day (mboe/day) in the first quarter of 2009, split between TAQA North (92.0 mboe/day), TAQA Bratani (40.9 mboe/day) and TAQA Energy (6.4 mboe/day), up from 112.3 mboe/day in the first quarter of 2008.
• Average net realized price of crude oil sold was US $35.78 per barrel for TAQA North, US $57.42 per barrel for TAQA Bratani and US $58.64 per barrel for TAQA Energy.
• Average net realized price for natural gas sold was US $4.53 per thousand cubic feet (mcf) for TAQA North, US $6.32 per mcf for TAQA Bratani and US $10.06 per mcf for TAQA Energy.

Finance

• In February 2009, TAQA announced a share buyback program of up to 10% (622.5 million shares) of the share capital of the firm. At the end of April 2009, TAQA had repurchased 116.7 million shares.
• During the period under review, TAQA repurchased bonds with a nominal value of US $201 million (AED 738 million). This has resulted in a gain of AED 174 million for the period.