Exploration group Dragon Oil more than doubled profits last year after it increased production and benefited from rising oil prices.

Net income surged to $106.4 million (€86.6 million), or 22.4 cent a share, from $49.8 million, or 12.17 cent, in 2004, the Dublin-based company said in a statement yesterday.

Revenue and operating profit almost tripled, to $248.8 million and $162.9 million respectively.

Dragon, whose principal asset is a production-sharing agreement in the Caspian Sea off the Turkmenistan coast, said average gross production rose to 19,426 barrels of oil a day last year from 13,264 barrels in 2004. Of the 2005 production, 14,008 barrels were attributable to Dragon, up from 8,630 a year earlier.

"The significant progress we made on all fronts in 2005 clearly bodes well for the continuing growth of our business," chairman Hussain M Sultan said.

The exploration company said its drilling campaign on the Lam 10 platform was in progress and that three development wells were completed last year. Seven wells worked on in 2005 yielded "excellent results" and these wells were now contributing "significantly" to production.

"While we are confident of the long-term potential and value of our existing asset, our plans for the future also include looking at other acreage to expand and diversify Dragon's asset base," Mr Sultan said. "The development and commercialisation of gas resources from the Cheleken contract area remains a major priority and discussions with the Turkmenistan government and other international operations concerning a joint gas export scheme will continue."

Dragon closed down one cent at €3.02 in Dublin yesterday.