Dublin-listed Dragon Oil said today it was on track to reach its production target of 40,000 barrels per day (bopd) and said production for the first nine-months of the year was 32 per cent higher than the same period in 2007.
In a statement the company said its bopd for the year-to-date was 39,770 up 32 per cent. This increased to 42,320 bopd in the third quarter, up 25 per cent over the same period last year
Dragon said its production capacity would be boosted next month when two more wells start production.
Despite a fall in sales volumes due to stock movements Dragon's cash reserves increased from $659 million to $820 million, including $80 million set aside to cover decommissioning liabilities. The average price paid for a barrel of crude this year was $110.
The company has invested approximately $200 million and has been awarded a $37 million contract the expansion of processing facilities.
Dragon CEO Abdul Jaleel AL Khalifa said the company was continuing to deliver strong results, with a 32 per cent increase in average daily production.
"The Company continues to strengthen and I believe that we will deliver long-term growth and return on investment for our shareholders through our 3-pronged strategy of developing the Cheleken Contract Area, commercialising the gas resources and most importantly, diversifying our asset portfolio," he said.
In a note to investors Davy Stockbrokers said the impact of a new petroleum law in Turkmenistan was being evaluated. Davy said it understood it may see Dragon's tax rate rise from 20 per cent to 25 per cent, which reduces its valuation of Dragon's oil reserves by 5 per cent to 480p per share.
At 11am Dragon Oil shares were marginally ahead at €1.99, gaving the company a market cap of €1.018 billion. its shares are 58 per cent lower so far this year.
