Dragon reports 19% rise in production

Exploration company Dragon Oil has reported a 19 per cent  increase in production for the first quarter compared with the same period in 2008.

The company has also more than doubled the volume of oil sold over the period with a total of 2.5 million barrels.

Dragon is an oil exploration and production firm whose activities are concentrated on fields in the Caspian Sea, off the Turkmenistan coast. It is 52 per cent owned by the government of Dubai.

No new wells were completed during the first three months of the year although drilling results from two development wells are expected next month.

Analysts said these results coupled with the crude oil price would determine the company’s share price in the near term.

At 2.05pm shares in Dragon were up 4 per cent at €2.61 and the stock has risen by 47 per cent so far this year.

The company had cash reserves of $833 million at the end of the first quarter, down from $876 million at the end of last year.

As previously announced, the company is investigating purchasing contracts involving former executives following irregularities discovered during a routine audit.

The company has appointed KPMG (Dubai) to conduct an investigation and said it will update the market “as and when required”.

Chief executive Dr Abdul Jaleel Al Khalifa said the company expected to complete eight wells this year and that capital expenditure totalled $81 in the first quarter.