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Shares of Dragon Oil plc (LSE:DGO) were trading in the red today, despite an “eventful” first half of the year, as described by its Chief Executive Officer, Dr. Abdul Jaleel Al Khalifa.
The Turkmenistan-focussed oil nd gas exploration, development, and production company said average daily production rate has increased by 10.7%, to 64,000 barrels of oil per day (bopd) compared to 58,000 bopd during the same period.
The numbers, however, were below the 70,600 bopd rate Dragon Oil already achieved in the first quarter of 2012, impacted by the “choking down of certain wells to control sand production”.
This made Dragon Oil to revise its gross production target growth for 2012 to between 10% – 15%, as opposed to the 15% it earlier perceived back in April. The company, nonetheless, is confident it will be able to achieve 100,000 bopd gross production level by 2015, as anticipated earlier.
The market responded with a 3.4% loss in Dragon Oil’s share price, to £5.425 a share, shedding off 19 pence by 11:50 AM GMT, following the announcement.
Strong Financial Position
On 6th June 2012, Dragon Oil commenced a share buy- back programme and set aside US$200 million to purchase as much as 5% of the total issued capital stock of the company “in recognition of the Group’s strong financial position and significant cash generating abilities”.
The move was made alongside an increased capital expenditure of US$208 million during the first six months of the year, more than a third higher than last year’s US$151 million.
The group’s cash position was still increased from US$1.5 billion to US$1.6 billion, as the company reported some 5.8 million barrels of crude oil sold at an average realised price of US$102 per barrel in the first half of the year.
“We maintain our medium-term guidance over the 2012-15 period of average gross production growth of 10% to 15% per annum, taking our gross field production to the target level of 100,000 bopd in 2015 and maintaining this plateau for a minimum period of five years,” the Group stated.
Company Spotlight
Dragon Oil plc is a Dubai-based oil and gas exploration, development, and production company with operations in Turkmenistan.
On 30th May 2012, the company, 51% owned by Dubai’s Emirates National Oil Company Limited, won an exploration contract in Iraq, in a consortium with Kuwait Energy and the Turkish Petroleum Corporation, the national oil company of Turkey.
Shares of Dragon Oil are listed on the main market of the London Stock Exchange since 1996.
