Dragon Oil posts record annual results

Independent pumping over 70,000 bpd from prize Turkmenistan field

Dragon Oil drilled 13 wells in 2011, two more than planned.
Dragon Oil drilled 13 wells in 2011, two more than planned.

Dragon Oil, a Turkmenistan-focused independent majority owned by Dubai’s ENOC, hit record revenue and hiked average oil production from the Cheleken Contract Area in the Caspian Sea by 30% to 61,500 barrels per day (bpd) through 2011.

In a company statement, Dragon said it is currently producing over 71,000 bpd, above earlier projections. The company drilled 13 exploration wells in 2011, two more than planned, with each well encountering strong commercial flows.

Dragon Oil - whcih is listed on the London Stock Exchange - sold 6% more oil in 2011 than 2010, exporting 99% of its crude through Baku. The company has secured full-entitlement rights for its oil exports until the end of 2012.

Company-wide oil and condensate 2P reserves at 31 December were upgraded to 658 million barrels.

The company remains locked in long-running negotiations with the Turkmenistan government over marketing its associated gas from Cheleken.

The company spent $351 million on capital development in 2011, down from $460 million in 2010.

"2011 was an impressive year in terms of production and reserves growth,” said chief executive Dr Abdul Jaleel Al Khalifa. “We succeeded in increasing gross field production by almost a third from the 2010 level thanks to an intensive drilling programme and strong results from the Dzheitune (Lam) West area. Encouraging results from the Dzheitune (Lam) West area have been meeting and at times surpassing our expectations since we entered this previously undrilled area in 2007 and have led to a significant upgrade of our oil and condensate 2P reserves.”

“This year, we were able to achieve a 183 per cent organic replacement of produced reserves, a remarkable achievement.”

The company is sitting on a cash pile of over $1.5 billion, even after acquiring farm-in rights in Tunisia, and is one of the 46 companies eying up exploration fields in Iraq that are due to be auctioned in March.

"As a result of strong oil prices and production growth, we have generated over US$1 billion in revenues, the highest annual earnings ever,” Al Khalifa added. “This further strengthens our financial position as we continue our growth towards the production target of 100,000 barrels of oil per day and actively pursue acquisition opportunities following the Tunisian farm-in of last year."


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