Exploration firm Dragon Oil said production is set to grow by as much as 20 per cent this year as new wells begin to make a contribution.

The firm said three new wells have been put into production since the beginning of the year. The average daily production rate for the three months ended March 31st was 57,800 barrels of oil per day, compared with 47,600 barrels a year earlier.

The company sold 2 million barrels of crude oil during the quarter, a 30 per cent rise on the same period a year earlier. Higher oil prices led to a 27 per cent rise in the average realised crude price during the quarter.

"Dragon Oil had a strong first quarter with a very solid production performance," chief executive Abdul Jaleel Al Khalifa said, adding that a number of significant projects are being progressed this year.

Dragon Oil also upgraded its reserves to 639 million barrels of oil and condensate at the year-end, as reserves rose in the Dzheitune (Lam) West area, which is located in Dragon Oil's principal asset of the Cheleken contract area, in the eastern section of the Caspian Sea, offshore Turkmenistan.

The company maintained its medium-term production target of 10 per cent to 15 per cent growth on average per annum between 2011 and 2013. It plans to complete 11 wells during the year's drilling campaign.