Dragon Oil to grow production by 10%

Dragon Oil is planning to spend $1.5bn (€1.1bn) on infrastructure and drilling activities over the next two years, with the aim to reach a production target of 100,000 barrels of oil per day by late 2015.

The Dubai-headquartered firm — which started life in Ireland in the 1970s as Oliver Prospecting & Mining — expects to grow total production by approximately 10% this year and by between 10% and 15% over the next two years.

In a trading update, the firm said its gross field production, for the first quarter of this year, amounted to around 72,300 bopd; 0.7% higher than the corresponding period last year.

Capital expenditure on infrastructure, drilling, and exploration assets amounted to around $107m in the first quarter, with gross production for March amounting to around 73,400 barrels of oil per day .

Meanwhile, Davy Stockbrokers has said Irish explorer, Petroneft Resources’s recent €61.5m farm-out deal with Oil India, regarding one of its chief assets in Russia, “rejuvenates” the investment case surrounding the firm.

“We believe that the farm-out deal for Licence 61 will be roundly welcomed by shareholders as it achieves a number of important objectives: it recapitalises the group’s balance sheet, it re-starts work on the licence, and it provides a platform to grow production and reserves,” Davy’s Job Langbroek said in a research note yesterday.