Dana Gas has reported a 20 per cent increase in profits for 2012 as the UAE-based company increased production in the Kurdistan region of Iraq.

Income rose to $165m, from $138m the year before, but revenues dropped 8 per cent due to spending cuts in Egypt and a shutdown of liquefied petroleum gas (LPG) production in Kurdistan.

Dana Gas says production in Egypt dropped as it was hit by delays in receivables due to the country’s political transition, forcing it to lower capital expenditure.

Meanwhile, the LPG production in Kurdistan has been down since an accident with a third-party LPG tanker in June 2012.

The company says it expects revenues to pick up when the LPG loading bay is repaired in the second quarter of 2013. It is also in discussions with the Kurdistan Region Government (KRG) to further expand production.

Dana Gas’s net production in 2012 averaged 60,000 barrels a day (b/d) of oil equivalent as increases in Kurdistan offset the decline in Egypt.

The Abu Dhabi-listed group has agreed to a $1bn restructuring of a sukuk (Islamic bond) that it failed to pay when it matured at the end of October 2012.

In November, Dana Gas signed an agreement with the emirates of Sharjah and Ajman to develop a shared gas field 40 kilometres off the UAE coastline.