Dragon Unveils Magical Year, Revenue Up 84%
Independent E&P company, Dragon Oil plc improved its revenue stream and profits dramatically in 2007. Revenue rose 84% since 2006, to U.S. $597 million (from $325 million). Operating profit reached $365 million, up 65% over 2006, and overall profit for the year rose to $304 million, up 63% over 2006.
Dragon experienced a 56% increase in average gross production to 31,997 (2006: 20,514 bopd), of which 21,739 bopd (2006: 15,115 bopd) was attributable to Dragon Oil. Additionally, six development wells and one appraisal/development well were drilled and completed, and six wells were successfully worked over.
The remaining recoverable proven and probable reserves stand at 651 million barrels, of which the Group's entitlement was 324 million barrels of oil and condensate as at the year end. Gross gas resources are estimated at approximately 3.4 trillion cubic feet.
Dragon purchased interests in Blocks 35 (10%), 49 (up to 10%) and R2 (10%) in Yemen. And the company's cash balance is up to $543 million, and it has no debt at year-end.
The company plans to spend approximately $400 million during the next two years on its infrastructure renewal program until the end of 2009. It also plans to deploy its own platform-based Rig 40 in 2008.
On the exploration front, Dragon plans to drill between eight and 10 development and appraisal wells per year for the next two years. Additionally, the company plans to plug and abandon at least two wells within 2008 as part of its long-term abandonment and decommissioning plans. Dragon also plans to commercialize the gas resources in the Cheleken Contract Area.
"Dragon Oil's producing asset in the Cheleken Contract Area, in the eastern section of the Caspian Sea, continues to perform strongly with our employees in the field demonstrating commitment and hard work, often in difficult operating conditions," said Hussain M. Sultan, executive chairman of Dragon Oil. "These solid financial results underpinned ongoing investment in the development program, and helped to secure the first step toward greater portfolio diversification."
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