Increased sales and rising oil prices led to an 11-fold growth in interim pre-tax profits at Dragon Oil plc, the company said yesterday.
Turnover at the Dublin and London-listed exploration group was $40.1 million (€34.6 million) in the six months to June 30th, compared with $15.9 million during the same period in 2002.
Profit before tax grew by more than 1100 per cent to $15.1 million (€13 million) from $1.2 million in 2002. The company said higher production and an increase in oil prices drove sales and profit growth in the first half of the year.
Earnings per share (eps) jumped from 0.34 cent to 4.17 cent. The directors did not recommend the payment of a dividend for the period.
Production from its wells in the Cheleken contract area in the Turkmenistan-controlled section of the Caspian Sea grew to 14,069 barrells per day (bpd) from 8,732 bdp in the first half of 2002.
Dragon's share of this more than doubled to 9,048 bpd from 4,329 last year. Total oil sales for the period increased to 1.6 million barrels from 669,000 barrels in 2002.
Operating and production costs grew to $13.4 million from $10.4 million. There was also a charge against its operating profits of $4.8 million for depletion, depreciation and amortisation.
The company attributed this to an increase of 109 per cent in production. There was also a slight fall in the value of Dragon's fixed tangible assets from $265.2 million at December 31st, 2002, to $264.1 million at the end of June.
During the period, Dragon repaid $10 million to its biggest shareholder, Emirates National Oil Company (ENOC). ENOC loaned it $40 million during the first half, which Dragon used to repay an existing debt to ENOC of $50 million. This left it with a net repayment liability of $10 million, made on May 3rd.
The company yesterday signalled that it intends to embark on a fundraising round in the future. In a statement, chairman Mr Hussain Sultan, said it did not generate enough cash to continue developing its oil and gas reserves.
Mr Sultan said Dragon would have to rely on external funding to generate the cash it needs to pay for its development activities, and stated the board is looking at all opportunities.
