Dragon Oil, an international oil and gas exploration, development and production company, announces its full-year results for the year ended 31 December 2011. These results are prepared in accordance with International Financial Reporting Standards as adopted by the European Union.
Key Operational and Corporate Highlights
Drilling and Infrastructure
- 13 wells completed during 2011 against an initial guidance of 11 wells;
- Average gross daily rate of production rose 30% to 61,500 bopd;
- Production exit rate for 2011 exceeded the target reaching 71,751 bopd (2010: 57,013);
- Drilling from the Dzheitune (Lam) C platform commenced; and
- Dzheitune (Lam) Block-1 gathering station completed and operational.
Corporate and Commercial Developments
- Dragon Oil sets a 100,000 bopd production target to be reached in 2015 and to be maintained for a minimum of five years thereafter;
- The Board recommends the payment of a final dividend of US cents 11 per share for 2011; the full-year dividend for 2011 amounts to US cents 20 (2010: 14 US cents);
- Year-end oil and condensate 2P reserves increased (after allowing for 2011 gross production) by 41 million barrels to 658 (December 2010: 639) million barrels at year-end 2011 with oil and condensate contingent resources upgraded to 88 (December 2010: 47) million barrels; gas 2P reserves and contingent gas resources remained at similar levels of c. 3 TCF;
- Marketing arrangements via Baku, Azerbaijan extended until the end of 2012 for all entitlement production;
- Farm-in agreement signed for a 55% participating interest in an offshore exploration block in Tunisia;
- Limited share buyback programme concluded on 4 November 2011 with five million shares purchased;
- Nomura International plc appointed Joint Corporate Broker alongside Davy; and
- Ernst & Young appointed auditors to the Group.
Strong Outlook for 2012-15
- Complete between 13 and 15 wells in 2012 and 15 to 20 development wells per year in 2013-15;
- Target annual production growth of 15% in 2012 and 10-15% on average per annum for 2012-15;
- Reach the 100,000 bopd production target in 2015;
- Evaluate options to enhance oil recovery from the reservoir by performing and analysing results of a water injection pilot project;
- Dzhygalybeg (Zhdanov) A platform due in 2H 2012;
- Plans to award a contract in 2012 to build the Dzheitune (Lam) D and E platforms;
- New jack-up rig under construction (“Caspian Driller”) expected for delivery in 1H 2012;
- Additional platform-based rig is currently being sourced to be mobilised in 2H 2012;
- US$1.0 billion estimated capital expenditure for oil infrastructure in 2012-15, including US$250 million for 2012 projects expected to be funded from operational cash flow;
- Minimise flaring and progress gas monetisation subject to market conditions; and
- Actively pursue the diversification strategy.