22nd Apr 2014 07:57
LONDON (Alliance News) - Dragon Oil PLC Tuesday said it expects its pace of drilling to pick up considerably as it now has three rigs drilling and one more to commence operations shortly.
In an interim management statement for the period January 1 to March 31, the oil and gas exploration firm said the average gross production rate in the first quarter 2014 stood at around 72,300 barrels of oil per day (bopd), up 0.7% on last year.
It said average gross production rate in March was around 73,400 bopd with the month's exit rate at just above 73,4000 bopd.
In terms of drilling, the firm said during the first quarter 2014 it completed one sidetrack in the Dzheitune field in Turkmenistan. The well at Dzheitune is now producing 1,175 bopd.
Dragon Oil said its water injection pilot project at Dzheitune is ongoing. It said it is currently injecting at a rate of about 3,600 barrels of water per day into the reservoir at the site.
On the exploration side of the business, Dragon Oil said drilling of an exploration well in Iraq started at the end of March. The well is targeting two prospective reservoirs and testing is expected to take place in the second half this year.
"Now we have three rigs drilling and one more to commence operations shortly, the pace of drilling will pick up considerably; albeit the completion of wells will be weighted more towards the second half of the year," Chief Executive Abdul Jaleel Al Khalifa said in a statement. "We expect production to increase from now to the year end."
The firm said it expects to grow production by around 10% in 2014 and by between 10% and 15% during 2015 and 2016.
"The production growth plan for this year calls for completion of between 14 and 16 wells and around 20 wells in 2015 based on the current and expected availability of drilling rigs," it said.
Dragon Oil said drilling activity this year will be weighted towards the second half of the year after its drilling programme was delayed at the beginning of 2014.
Financially, cash and cash equivalents and term deposits at the period-end totalled approximately USD1.90 billion compared with 1.92 billion in December.
Capital expenditure for the first quarter 2014 was around USD107 million compared with USD57 million a year earlier. Of this capital expenditure, approximately 43% was attributable to drilling, 50% spent on infrastructure with the balance spent on exploration assets. Dragon Oil said it expects to spend USD1.5 billion on capital expenditure for infrastructure and drilling in the next two years.
The stock was trading at 602.00 pence early Tuesday, up 1.50 pence or 0.3%.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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