Mid-tier oil and gas producer, Dragon Oil reported an 11% increase in average daily production of 42,808 barrels of oil per day for the first half of 2009 compared to the same period in 2008. The production update was part of a wider operational and financial update.
The lift in production was largely due to two new wells coming on stream in May at combined rates of 3,554 barrels of oil per day and 2,628 barrels of oil per day. An additional two wells are due for completion by the end of July. The Caspian Sea focused producer also reported that its entitlement barrels in the first half rose to 65% of gross field production, up sharply from 54% in the first half of 2008.
Capital Expenditure for the period was US$155 million, and cash balances remained very robust at US$875 million.
"The first six months of 2009 were eventful for Dragon Oil both on the operational and corporate fronts. Good progress was made with securing rigs to support our long-term drilling programme, but due to changes in the 2009 drilling programme and certain operational issues the average production for 1H 2009 was below our expectations,” stated Dr Abdul Jaleel Al Khalifa, CEO of Dragon Oil. “However, we remain committed to our drilling programme and expect to achieve up to 15% growth in annual production on average over the years 2009-11. Despite the volatility in oil prices and challenges in the broader economy, we maintained a strong financial position with a cash balance of US$875 million."
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