Dublin and London-listed explorer, Dragon Oil, is set to raise €130 million to boost production at its Turkmenistan oilfield.

The company announced from its Moscow offices yesterday that it planned to raise $167 million (€129.8 million) through a share placing and rights issue.

The company said that it has conditionally placed 59.625 million shares with institutional shareholders in north America, Europe and the Gulf states to raise $100 million or $93.1 million net of expenses.

The placing represents 14.7 per cent of its existing issued share capital. Davy Corporate Finance, Aton International and Emirates Financial Services in the Gulf arranged the placing. Both London and Dublin are expected to admit them for trading on May 5th.

In addition, the company intends to offer qualifying shareholders just over 39.9 million shares on the basis of 90 new shares for every 911 already held to raise up to $67 million, or $64.5 million net of expenses. The stock will be admitted on May 26th.

Its largest shareholder, Emirates National Oil Company (ENOC), will take up its full open offer entitlement of 23.9 million shares as repayment for a $40 million loan, which is due next month.

This will leave ENOC with 52 per cent of the company. The company has given a commitment not to sell any of this holding or reduce its stake below 51 per cent for 12 months after the launch of the offer.

Dragon will use the cash raised to fund a $248 million drilling programme in its area of the Cheleken field in the Caspian Sea, off the Turkmenistan coast.

The programme is due to run from January last year to January 2009 and is designed to exploit the field's proven reserves of 108 million barrels of oil.

The company said it would double daily production to 40,000 barrels by 2008. Dragon closed two cent up at €1.33.