Dublin-listed oil and gas producer Dragon Oil has accumulated $867 million (€670million) in cash to fund investments and possible acquisitions for this year and reported a 28 per cent increase production in 2008.
In an end of year statement the company said it had achieved average daily production of 40,992 barrels of oil per day (bopd) last year and that capital spending for the year was $307 million.
Dragon’s chief executive Abdul Jaleel Al Khalifa said although the sector was contending with lower than expected oil prices “we are confident our forward thinking, proactive nature and strong cashflows will stand us in good stead”.
While considering acquisitions, “we have to maintain production of our main assets,” he said in a telephone interview with a news agency.Dragon will add one oil and gas platform by the end of 2009, bringing the
number of producing platforms operated by the company to 12. “There were supposed to be more, but we have decided to utilize the market situation, as we’e expecting prices to come down.”
The company is targeting a 15 per cent increase in production this year and is forecasting capital expenditures of $600 million.
Dragon said it will deploy three full-time rigs this year. Nine development wells were completed last year and 10 are planned for 2009. The company also plans to double the capacity of its onshore oil and gas processing facility to 100,000 barrels-a-dayby early 2010.
Dragon, which pumps all of its oil from Turkmenistan, is studying acquisitions of assets and companies to expand further in Central Asia, the Middle East and North Africa, Mr Al-Khalifa said.
At 1.45pm shares in Dragon Oil were trading down over 9 per cent at €1.46, giving the company a market capitalisation of €746 million. The company will publish its financial results on March 4th.
Additional reporting agencies
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