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Dragon Oil (LSE:DGO), the oil and gas company based in Dubai, United Arab Emirates recorded a huge increase in growth for 2011. The company’s production of oil increased to 61,500 barrels of oil per day during the previous year. Remarkably, this represented a 30% increase from 2010.
Reasons for Impressive Growth
The company’s impressive growth is largely attributed to the successful completion of 13 new development wells last year. This was against an initial guidance of 11 wells and drilling from the Dzheitune (Lam) C platform.
As a result, Dragon oil was able to reach a target output of 70,000 barrels of oil per day by mid-December. The final 2011 exit rate was higher at 71,751 barrels of oil per day.
The company invested approximately $351 million in capital expenditure. [4] About half of this money was spent on improving its infrastructure, including the building of platforms in Turkmenistan and undertaking research to assess the possibility of acquiring other platforms.
Record revenues
Because of the company’s impressive production growth, it realised over $1 billion in revenues, their highest annual earnings ever. This played a significant role in strengthening the company’s financial position as it strives to reach its target production rate of 100,000 barrels of oil per day.
In addition, strong oil prices in 2011 also led to the company’s record revenues. Prices for Brent averaged about $111 per barrel during the year. This represented about 41% increase from 2010. The company said crude oil price in 2011 was averaging at $101 per barrel. This represented a 9% discount from Brent, which is expected to fall between 10% and 13% this year.
CEO comments
The company’s Chief Executive Officer, Dr Abdul Khalifa, said:
“2011 was an impressive year in terms of production and reserves growth: we succeeded in increasing gross field production by almost a third from the 2010 level thanks to an intensive drilling programme and strong results from the Dzheitune (Lam) West area.”
“Encouraging results from the Dzheitune (Lam) West area have been meeting and at times surpassing our expectations since we entered this previously undrilled area in 2007 and have led to a significant upgrade of our oil and condensate 2P reserves.”
“This year, we were able to achieve a 183% organic replacement of produced reserves, a remarkable achievement.”
Since the company made the statement, its stocks have increased by 6% as at 11.33 A.M. today.”
Company spotlight
Dragon Oil is independently engaged in upstream oil and gas exploration, development, and production activities principally in Turkmenistan.
References
↑ StockMarketWire News
↑ The Telegraph
↑ Silobreaker News
↑ Irishtimes News
↑ Company homepage
