Dragon oil increased gross field production by 33% in 3Q 2011
Azerbaijan, Baku, Oct. 21 /Trend, A.Badalova/
Dragon Oil's gross field production for the third quarter of 2011 averaged 61,500 barrels of oil per day (bopd) compared to 46,400 bopd in the third quarter of 2010, the company said in its Interim Management Statement.
The international oil and gas exploration and production company Dragon Oil issued its Interim Management Statement in accordance with the EU Transparency Directive. The statement covers the period from 1 July 2011 to date. The financial and production data are for the period from 1 July 2011 to 30 September 2011.
The production increased by 33 percent compared the level reached during the corresponding period in 2010 on the back of a solid drilling programme. Four wells with an average initial flow rate of above 2,000 bopd were put into production in 3Q 2011.
"Production since the beginning of the year has been strong, having been supported by a significant number of wells already put into production this year, and is expected to continue to be solid with three more wells remaining to be completed in 2011," Abdul Jaleel Al Khalifa, Dragon Oil CEO said. As a result, we anticipate this year's gross production growth to be somewhat above 25% with a robust exit rate of approximately 70,000 bopd".
Dragon Oil sold 2.7 million barrels of crude oil in 3Q 2011, which is 40% lower than the volume sold during the corresponding period last year. In 3Q 2011, Dragon Oil exported approximately 95% (compared to approximately 65% in 3Q 2010) of its crude oil production through Baku, Azerbaijan with the balance sold to an independent third party that has an Iranian swap agreement.
To ensure safe and uninterrupted export of its share of crude oil production, Dragon Oil has agreed an extension of the current contract with Socar Trading SA via Baku, Azerbaijan, until 31 December 2012. The terms of the contract are FOB the Aladja Jetty, for export of our crude oil production share to international markets primarily using the BP-operated BTC (Baku-Tbilisi-Ceyhan) pipeline, the statement said. It is expected that the realised crude oil prices will be marginally less favourable (10% to 13% discount to Brent) than the current realised prices generated through that route.
Since the beginning of the second half of 2011, Dragon Oil has completed five wells.
The average realised crude oil price during 3Q 2011 was approximately $103/bbl, which was 51% higher compared to the corresponding period last year. For the year to 31 December 2011, Dragon Oil expects to achieve an average realised price at about 10% discount to Brent.
Dragon Oil plc is an international oil and gas exploration, development and production company, quoted on the London and Irish Stock exchanges. Its principal producing asset is in the Cheleken Contract Area, in the eastern section of the Caspian Sea, offshore Turkmenistan.
Dragon Oil (Turkmenistan) Ltd., a wholly owned subsidiary of Dragon Oil plc, holds 100% interest in and is the operator of the Production Sharing Agreement for the Cheleken Contract Area. The operational focus is on the re-development of two oil-producing fields, Dzheitune (Lam) and Dzhygalybeg (Zhdanov).