Shares in Dragon Oil jumped by 10 per cent yesterday after the exploration firm reported an 85 per cent rise in profits for 2003.

Dragon Oil, which operates mostly in offshore Turkmenistan, said it had made close to $28.79 million (€23.4 million) in profits last year, up from $15.52 million in 2002.

Operating profits rose from $20.8 million to $37.3 million.

The growth came as turnover climbed by 62 per cent to $82 million, boosted by increased production and higher oil production.

Dragon sold oil through Baku in Azerbaijan and through Iran during the year.

It generated an average of 8,385 barrels of oil each day, compared to 5,778 in 2002.

The firm's chairman, Mr Hussain M Sultan, said 2003 had been "a very good year" and looked ahead to "excellent developmental prospects".

"I am confident that we can achieve production growth for 2004," he said.

Dragon is due to begin a seismic survey on its Caspian interest over the next few months, after raising $18 million in a share placing late last year.

Mr Hussain said the survey was critical to establishing the full potential of the field.

He said the company continued to explore "various sources" of alternative financing options to fund its long-term development plans in the area. These options are likely to include a "farm-in" arrangement, which would essentially see Dragon partnering with another company.

Dragon Oil's shares bucked a weak Irish market to close five cents stronger at 53 cents last night.