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Dragon Oil (LON:DGO) said its profit fell in 2013 as lower prices were received for its oil, yet the company increased its full-year dividend by 10% to 33 US cents.
Dragon has renegotiated marketing arrangements last month so that the amount received for its oil is expected to be at a 14%-17% discount to the benchmark Brent crude price for 2014.
Average production increased 9.1% to 73,750 barrels of oil per day (bopd) as 10 wells were completed during the year.
"Delays in the arrival of rigs constrained our ability to grow average gross production at a higher rate; nevertheless, the 9.1% growth achieved is a solid result,” said chief executive Abdul Jaleel Al Khalifa.
The company expects to complete between 14 and 16 wells, including one sidetrack, this year and around 20 wells in 2015 when it hopes to achieve its 100,000 bopd production target.
“With the mobilisation of rigs, drilling will pick up considerably in the months ahead to enable us to reach this target,” the CEO said.
Oriel Securities described the results as “largely steady” and emphasised that free cash flow of more than US$400m per year appears intact, and will probably be at a similar level going forward.
Elsewhere, Dublin based Davy concurred. “Dragon's results are in line with forecasts and we do not anticipate any significant change to our 2014 and 2015 estimates,” Davy analyst Caren Crowley said in a note.
“Cash generation continues to be good and more than covers capex, taxes and dividends.
“Dividend growth of 10% is in line with net cash growth but the extent of the return of cash may disappoint given the $1.9bn net cash pile and marginally lower interest yields in 2013.”