Dragon Oil (LON:DGO) has extended an agreement for transport and sale of its crude until the end of next year.
The firm has secured the deal with Socar Trading for all its anticipated export entitlement production until December 31, 2014 via Azerbaijan, it said in a brief statement.
Dragon expects the realised crude prices under this contract to be at a 14-17% discount to Brent.
Chief executive Dr Abdul Jaleel Al Khalifa said: "I am pleased to announce that we will continue to work with our partners who have provided us with a stable market for the goup's growing volume of the crude oil production.
"We have thoroughly analysed available routes to export our share and realised that additional options can be available in two-three years, which may enable us to achieve higher realised prices in the future."
Two days ago, the company's shares advanced over 2% as it revealed that its operations in the Caspian Sea ended 2012 on a high.
Average production for the whole year was 67,600 barrels of oil per day (versus 61,500 barrels of oil per day in 2011), but by December the rate peaked at 73,500 barrels of oil per day (bopd).
The improvement is a result of Dragon’s extensive drill programme, which continues this year. In 2012 it drilled 15 wells.
The drilling also led to a significant uplift in reserves - with 180% reserves replacement in the year - as it ended the year with 677mln barrels of oil and condensate reserves.