Dragon production hit by infrastructure
DRAGON Oil, the Dublin-listed explorer focusing on projects in Turkmenistan, said average first-half production was below its forecasts due to "infrastructure issues".
Average daily production rose 8pc to 46,420 barrels of oil from a year earlier, the company said yesterday. Under a production sharing agreement, Dragon's share of gross production (entitlement barrels) is 25,531 barrels.
"Dragon's production growth for first half is disappointing, with second quarter production declining 5pc on the first quarter," Davy Stockbroker analyst Caren Crowley said.
"At first glance, we will be pulling back our forecast production growth for full-year 2010 from 14pc to 7pc."
The installation of infield pipelines and the upgrade of an onshore processing facility, all due to be completed in the second half, should resolve the infrastructure issues, Dragon said. The company said it expected average production growth of as much as 10pc in 2010 and 10pc to 15pc annual growth in the three years to 2012.
Dragon is confident infrastructure problems are being overcome, chief executive Abdul-Jaleel al- Khalifa added.
Shares in Dragon closed down 1pc at €5.16 in Dublin, giving the company a market value of €2.66bn. Capital spending was about $174m (€135m) during the first half.