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Dragon Oil announces its Interim financial results for the period ended 30 June 2009

Iran: Monday, August 17 - 2009 @ 15:26

Operational performance

- Average gross production increased by 11% over the 1H 2009 period to 42,808 bopd (1H 2008: 38,482 bopd), of which 27,782 bopd (1H 2008: 20,850 bopd) was attributable to the Group;
- Two wells successfully completed in 1H 2009;
- Further two wells came on stream in July and August 2009;
- Contract for the Iran Khazar rig extended for another two years;
- Six months’ contract for the Astra jack-up rig secured to drill two wells, starting in November 2009;
- Dzheitune (Lam) B platform currently being installed; and
- Storage capacity added and Phase 2 upgrade of the export facility completed.

Outlook for 2H 2009

- On track to complete a total of eight wells during 2009;
- Production growth for 2009 is likely to be below 15%; we maintain our target of annual gross field production growth of up to 15% on average for 2009-11;
- Secure another platform-based rig to start drilling from Dzheitune (Lam) 28 in Q4 2009;
- Drilling scheduled to commence from Dzheitune (Lam) B platform in Q4 2009 using the Iran Khazar jack-up rig; and
- Initiate discussions on gas pricing.

Dr Abdul Jaleel Al Khalifa, Chief Executive Officer, commented:

“We continue to build momentum towards achieving significant production growth in the coming years. We have contracted the Iran Khazar rig for another two years and are looking to secure another platform-based rig to ensure that we have three full-time rigs operating simultaneously before the end of the year along with an additional rig on a short-term contract. Our infrastructure upgrade and renewal programme has showed progress, with the expansion of our export capabilities and the construction of the Dzheitune (Lam) B platform, which is currently being installed in the Western part of the Dzheitune (Lam) field.”

“With the slowdown in the broader economy, we have been able to drive cost optimization by renegotiating contracts and re-tendering certain projects. Despite the slow start to the drilling programme in 2009, we achieved an 11% growth in production compared to 1H 2008. While the overall production growth in 1H 2009 was below our expectations, we expect more wells to come on stream in 2H 2009 with the aim to complete up to 35 wells during the 2009-11 period. That will help us achieve our long-term goal of annual production growth of up to 15% on average for 2009-11.

“The first half of 2009 has been a challenging period for Dragon Oil, but the full support of the Board and the enthusiasm and teamwork across the Group have enabled us to move ahead confidently.”

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Monday, August 17- 2009 @ 15:26 UAE local time (GMT+4) Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of Mediaquest FZ LLC.

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