DRAGON Oil has said that oil production on its block in the Caspian sea region of Turkmenistan has been increased by 20 per cent with a new drilling technique.
Using a hot oiling system had increased production attributable to Dragon to 1,800 barrels of oil per day, managing director, Dr Oliver Waldron, told the company's annual general meeting. Hot oiling uses hot liquid to remove deposits of wax like material which can clog a well.
Dragon, which is registered in Dublin but controlled by a group of Indonesian businessmen, more than trebled its proven and probable oil and gas reserves with the recent acquisition of a 60 per cent stake in Larmag Energy Assets (LEA). LEA is a joint venture partner with the state owned Cheleken company. The company's new chairman Mr Arifin Panigoro, who paid £37.5 million for a 47 per cent stake in Dragon earlier this year did not attend the meeting.
Dr Waldron told shareholders that the joint venture should receive $14 million by the end of the year from the sale of 1.5 million barrels of oil which the company was owed by the Turkmen authorities. This would provide good working capital, he added.
In response to a shareholder query, Dr Waldron said Dragon's low share price was "a matter that exercises the management greatly". The company's asset value was clearly better than the share price, but he said that convincing the market would be "a slow process of education".
