Higher oil prices, lower finance costs and a foreign exchange gain helped Dragon Oil increase its pre-tax profit to $15.3 million (€12.6 million) in the first half from $15.1 million in the same period last year, despite lower production levels.
The oil and gas exploration company said that a gap in its drilling programme in 2003 and anticipated well decline rates served to depress production. As a result, turnover slipped to $34.8 million from $40.1 million in the first six months of 2003.
Operating profit fell to $18.8 million from $19.9 million while basic earnings per share were down 9 per cent to 3.78 cents.
However, Dragon, whose main interest is a production sharing agreement in the Cheleken contract area in the eastern Caspian Sea, offshore Turkmenistan, said its performance in the second half should improve with an anticipated increase in production.
Dragon's LAM 21/108 well has been completed and well 21/109 is being drilled. The company is progressing with its development plan for Cheleken, where it will also be seeking to assess the gas potential of the area.
"The benefits of the current capital expenditure programme will positively impact the performance in 2005," chairman and chief executive Mr Hussain M. Sultan said.
