Higher oil prices and increased production were behind a fourfold increase in first-half operating profits at Dragon Oil. The exploration group said interim operating profits surged to $77.6 million (€64.3 million) from $17.4 million in the first half of 2004.

Turnover increased to $112.8 million from $34.8 million, while basic earnings per share rose to 11.46 cent from 3.78 cent.

Dragon, whose principal asset is a production sharing agreement in the Caspian Sea off the Turkmenistan coast, said average gross production in the first six months of the year rose by nearly 80 per cent to 19,533 barrels of oil per day (bpd). Of this, 14,044 was attributable to Dragon, up from 6,614 a year earlier.

The company said production growth remained its priority and it was achieving this through continuous drilling programmes.

"We are accelerating this in the second half of the year," Dragon's chairman, Hussain M Sultan, said.

Given high commodity prices and the positive production outlook, Dragon said it was set for a strong second-half performance.

The company's balance sheet was strengthened after it successfully raised $156.2 million, net of expenses, through a share placement and open offer which was completed in May.

At the end of June, total debt stood at $32.1 million after repayment of a $40 million loan facility with its majority shareholder, Emirates National Oil Company.

Shares in Dragon closed nine cent - or 3.3 per cent - lower at €2.63 in Dublin last night.