Dragon looks to strong oil and gas output
DRAGON Oil, an explorer focusing on Turkmenistan, expects oil and gas output to rise as much as 15pc a year after increasing in the first quarter.
Production gained 9pc from a year earlier to 47,654 barrels of oil a day after three wells came on stream, Dublin-listed Dragon said yesterday in a statement. The company ended the quarter with a cash balance of $1.1bn.(€0.83bn)
Dubai-based Dragon's shares have doubled in the past year as oil prices rose and the company stepped up investment. The shares extended those gains yesterday, closing up 3.1pc at €5.63 in Dublin.
The explorer said earlier this month it will divert some crude exports to Azerbaijan as the US presses companies to stop trading with Iran, where Dragon sold about 90pc of its oil in swap agreements last year.
The company expects production growth of 10pc to 15pc a year through 2012, Dragon said yesterday.
"This year we have added workovers and sidetracks to our drilling programme in addition to the objective of completing 11 development wells by year-end," Chief Executive Officer Abdul Jaleel al-Khalifa said. The company, which has a large cash pile, said net cash at the end of March was $1.104bn, marginally down on the $1.138bn recorded in December.
"On balance, while the headline production figure is slightly below our expectation," said Goodbody Stockbrokers analyst Gerry Hennigan. "More importantly, the trend in net cash is broadly in line with estimates and is clearly benefiting from the current strength in crude prices."