OIL AND gas explorer Dragon Oil said it was hopeful of progress on a gas sales deal in Turkmenistan this year but would also diversify into other areas as lower oil prices led to a 30 per cent fall in 2009 profits.

Dragon said it would use its cash balance of more than $1 billion to help it commercialise its gas resources and make acquisitions to diversify its asset base away from Turkmenistan.

Chief executive Abdul Jaleel Al Khalifa said Dragon had tried to start talks last year with the Turkmen government to sell its gas in the country but problems with the logistics of meeting had held up progress. “We have proposals that we are trying to put on the table to start the discussion on this,” he said. “Hopefully within the first half of 2010 we can make significant progress in this area.”

Dragon shares closed at €5.31 in Dublin last night, up 21.79 per cent in the year to date, valuing the company at €2.7 billion.

In its preliminary results yesterday, the company said its 2009 results were “solid” as oil prices recovered throughout the year.

Pretax profit fell to to $259 million in 2009 from $369 million the previous year. Although sales of crude oil rose by 40 per cent over the year, a lower comparative oil price hit revenue.

Meanwhile, average daily production was up, increasing 9 per cent to 44,765 barrels of oil per day (bopd) from 40,992 in 2008. – (Reuters)