Dragon Oil plc has announced its interim results for the period ended June 30, 2008 .
Another Strong Operational Performance:
- Average gross production increased by 36% over the period to 38,482 bopd (H1/07: 28,321 bopd), of which 20,850 bopd (H1/07: 21,062 bopd) was attributable to the Company. Attributable barrels decreased due to full recovery of capital expenditure.
- Peak production rate of 43,227 bopd achieved on June 1, 2008.
- Four wells completed successfully in H1/08, with a fifth well and a sixth well completing in July and August 2008 respectively.
- Capital expenditure of US $154.5 million included US $89.5 on drilling activities and US$65 million on infrastructure projects.
- US $170 million, 15 month contract awarded in July for a new 30-inch, 39.4 km trunkline to bring all the oil and gas produced in the Cheleken Contract Area onshore to the Company's processing facility.
- Cash and term deposits of US $659 million and no debt at period-end.
A Positive Outlook
- On course to achieve drilling targets and deliver significant production growth for 2008.
- Execution of the US $400 million infrastructure refurbishment and development program prior to the end of 2009.
- Tendering for up to four new rigs and for phase 2 of the processing facility.
- Deploy its own, refurbished platform-based Rig 40 in Q4 2008.
- The Front End Engineering Design study planned for the onshore processing facility and associated infrastructure for the gas development project.
- Geophysical and geological studies ongoing in Dragon Oil's non-operated blocks in Yemen.
- Pursue value-adding acquisitions, further diversifying Dragon Oil's portfolio.
Hussain M. Sultan, Executive Chairman, commented, "Dragon Oil continues to make strong progress towards achieving its targets. The drilling program is on schedule having drilled six wells to date and an additional two wells scheduled for completion in H2 2008. This will enable the Group to achieve its average daily production rate target of 40,000 bopd for the year by the end of 2008.
"Our finances have strengthened further over the period which will fund Dragon Oil's infrastructure investment programme and will place us in a strong position to diversify our asset portfolio. Key projects are progressing well with the signing of a contract for the new 30-inch trunkline and the tendering process for a number of additional important projects nearing the completion phase.
"We are confident that Dragon Oil will deliver on its promises for 2008 and will continue to execute its projects in Turkmenistan in such way as to progress our development plan and to achieve continuous, improved results. We are working hard to ensure a bright and positive outlook for 2008 and beyond."