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A big bluff? UAE’s Dana Gas considers London move

A big bluff? UAE’s Dana Gas considers London move

The GCC’s only listed natural gas company has seen its stock decline 14.8 percent and its CEO says it’s because they’re misunderstood

April 20, 2011 10:39 by

“She’s got a ticket to ride and she don’t care…” Yes, that good ol’ Beatles song is running through Kipp’s head having reading news of Dana Gas contemplating listing its shares in London.

The Gulf’s only listed natural gas company has not been receiving favourable support lately, even seeing a 14.8 percent decline in the last six months due to the weak local investor sentiment.

There’s no timeline for when (and IF) the company will pursue the London listings. Yes, for Kipp that’s a big ‘IF’, especially since just weeks ago Oman’s Renaissance Services pulled plans to list its Dubai oilfield services unit Topaz Energy and Marine in London and Kuwait Energy has just recently deferred its own share sales also in London.

Will they or won’t they? Well, Dana Gas chief executive Amhed Al Arbeed told the National they’ve been considering the listing for some time now anyway and that the regional unrest has lowering their share prices has prompted them to seriously consider the move.

But then again, Al Arbeed follows that thinking with this next quote: “Then there’s the nature of our business. It is not understood by the investors in the region because the governments here control the oil and gas.”

So which one is it really? Are share prices falling because of regional unrest or is it because it allegedly misunderstood by potential investors?

Could this be a case of bluff, for the Sharjah-based company? In hopes that news of a potential London listing would make the company more attractive to local investors?

“She said that living with me…is bringing her down, yeah…”

Dana Gas has major operations in the UAE, Iraq and Egypt. Its share price target was cut by 10 percent this month by research firm AlembicHC, which warned that receivables at the gas company are expected to balloon temporarily in the short term as the Egyptian government defers on payments. IF this happens, we may possibly see sporadic blackouts similar to that of the summer of 2009 in Sharjah. Those blackouts were indirectly due to nonpayment of Dana Gas services which prompted scheduled electricity shutdowns until the payment was made, or so Kipp hears.

Whether or not this is partly the reason it’s not been the most popular company on the block, for now it seems Dana is flaunting its ticket to ride…all the way to London. And it’s a matter of time if investors are taking notice.

“She’s got a ticket to ride and she don’t care…”

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