UAE: Dragon Oil 1H Revenues Up 91 pct

Dragon Oil plc, an international oil and gas development and production company, today announced its interim financial and operational results for the period ended 30 June 2011.

Operational performance

• Growth of 25% in the average gross production to approximately 58,000 bopd (1H 2010: 46,420 bopd) achieved in 1H 2011;
• Eight new development wells completed to date (including one well from the 2010 drilling campaign);
• 2011 drilling programme increased to comprise 12 wells, plus one sidetrack and one workover, versus 11 wells previously stated; and
• The contract for the construction of the Dzhygalybeg (Zhdanov) B platform awarded.

 Outlook for 2H 2011

• Production growth target for 2011 of up to 20%;
• Five development wells, one sidetrack and one workover remain to be completed by the year-end;
• Dzheitune (Lam) Block 1 to be commissioned within a few weeks;
• Dzheitune (Lam) C platform due in 4Q 2011; and
• Interim dividend of 9 US cents announced.

Outlook for 2011-13

• Maintain target of average annual production growth in the range of 10% to 15%;
• Super M2 jack-up rig to be delivered in 1Q 2012 to commence drilling in 2Q 2012;
• Dzhygalybeg (Zhdanov) A platform expected to be installed towards the end of 1Q 2012;
• Award contracts for another two wellhead and production platforms;
• Lease a 3,000 hp land rig for offshore operations;
• Active and focused search for suitable acquisition assets; and
• Dual strategy for gas monetisation explored.

Dr Abdul Jaleel Al Khalifa, Chief Executive Officer, commented:

“We continue to successfully ramp up production from the Cheleken Contract Area, which in the first six months of this year increased by 25% over the corresponding period in 2010. With five more wells to be completed by the end of the year plus a sidetrack and the workover of an existing well, we are set to achieve strong production growth over last year.
The first six months of 2011 were also a record in terms of revenues generated: the best ever result over comparable periods due to the continued strong production growth and high realized oil prices.
On the gas monetisation front, we are looking at a dual strategy, which would involve a short-term agreement, reflecting the current weak global gas demand, and then a long-term agreement more in line with gas export marketing.
We remain prudent in our M&A strategy and only target those opportunities that offer value-adding diversification and growth potential.”

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Source: Dragon Oil, August 10, 2011;