Dragon Oil first-half profits decrease by 37%

DRAGON Oil, the Irish-listed exploration company, has suffered a 37% drop in first-half profits and a 29% fall in revenue.

Pre-tax profit for the first six months of the year came in at $105 million (€74.6m) – compared with $166.9m for the same period last year. Operating profit, meanwhile, was down by 39% to $122m and revenue fell by 29%, year-on-year, to $263.5m.

On a brighter note, Dragon – which is headquartered in Dubai and 52% owned by the Emirates National Oil Company (ENOC) with its shares dually listed in London and Dublin – successfully completed two wells during the first half of this year, with a further two coming on stream last month and earlier this month. The company is on track to complete a total of eight wells by the end of this year and achieve production growth of around 15%.

Average gross production increased by 11% – on a year-on-year basis – in the six months to the end of June, to 42,808 barrels of oil a day (bopd).

Meanwhile, although the first half figures showed a 0.4% like-for-like increase in capital expenditure to $155.1m; the company said yesterday that it might cut investment in infrastructure this year, as a whole, due to delays in building a gas pipeline and processing unit in Turkmenistan.

Dragon chief executive Dr Abdul Jaleel Al Khalifa said the first half of the year has been “a challenging period” for the company, but management is confident about the future.

“We continue to build momentum towards achieving significant production growth in the coming years. We have contracted the Iran Khazar rig for another two years and are looking to secure another platform-based rig to ensure that we have three full-time rigs operating simultaneously before the end of the year, along with an additional rig on a short-term contract,” he said.

“With the slowdown in the broader economy, we have been able to drive cost optimisation by re-negotiating contracts and re-tendering certain projects,” he added.