Dragon Oil beats oil price crash to grow revenues

International oil and gas exploration and production company Dragon Oil reported a 4 per cent increase in full-year revenues on Tuesday, and said it is targeting output growth of 10 per cent for 2015.

Revenues at the company rose to $1.1 billion, a result of higher sales volumes, which were offset by lower realised prices. Dragon Oil generated $0.8 billion in cash from operations. Pre-tax profits dipped by 15 per cent to fall back to $589m.

Fourteen wells were completed during 2014 and average gross daily production increased by 6.8 per cent to 78,790 barrels of oil per day. Dragon Oil will pay a dividend of 36 cents a share in 2014.

Dragon Oil had been touted as a potential acquirer of Petroceltic, but in its results, the company said “The group considered but decided not to pursue a significant corporate acquisition in 2014”.

In a note, Davy Stockbrokers said that the stock “remains a safe haven for those who believe the oil price will remain lower for longer, and it continues to offer production growth”.

Looking ahead, Dragon Oil said it would complete between 15 and 20 wells a year in 2015 and 2016, and is targeting annual production growth of around 10 per cent or higher in 2015 at 100,000bopd.

Dragon OIl will spend around $50-100m on exploration a year, and will “actively pursue the diversification strategy to add development assets to the portfolio”.