Dragon Oil (LON:DGO) ended 2012 in rude financial health. It had more than US$2.1bn on the balance sheet, allowing it pay a 15 cents final dividend and maintain its US$200mln share buyback programme.
Revenues for the year were little changed at US$1.16bn, while profits were down 7% at US$600mln as the group incurred higher field operating costs and depletion charges.
However, at this stage in its development, production from its fields in the Caspian Sea is the key performance indicator for Dragon.
Output rose by 10% in 2012 to 67,600 barrels a day and hit 73,500 barrels in December.
The performance was achieved against a backdrop of production problems encountered in the second quarter of 2012, which were quickly resolved.
“We mobilised our highly professional and experienced operational teams to tackle the challenge; the production quickly returned to the previous level,” said chief executive Abdul Jaleel Al Khalifa.
The plan is to be at 100,000 barrels in 2015. To that end it completed 15 new wells last year, at the very upper end of forecasts and plans complete 13 to 15 wells and two workovers in 2013. A further 20 wells per year are planned for 2014 and 2015.
Dragon’s principal producing assets are in the Cheleken Contract Area, in the eastern section of the Caspian Sea, off the coat of Turkmenistan. Its focus is on the re-development of two producing fields: Dzheitune (Lam) and Dzhygalybeg (Zhdanov).