4th Apr 2005 07:01
Dragon Oil PLC04 April 2005 DRAGON OIL PLC ("DRAGON" or the "Company") ANNOUNCEMENT OF RESULTS FOR 2004 Dragon Oil Plc, the international oil and gas exploration and productioncompany, today announced its results for the year ended 31 December 2004. HIGHLIGHTS • In summary, the results for 2004 compared with 2003 were: Turnover US$97.1 million +18%Operating profit US$57.1 million +53%Profit after tax US$49.7 million +73%Earnings per share (Basic) 12.31 cents +56% • Dragon recorded a turnover of US$97.1 million (2003: US$82.0million) resulting from sales of 2.8 million (2003: 3.2 million) of itsentitlement barrels. • The average gross production from the Cheleken Contract Areaduring the period was 13,264 barrels of oil per day ("bopd") with 8,630 bopdattributable to Dragon. Production reached 20,532 bopd in the second half of theyear. • Profit after tax of US$49.7 million (2003: US$28.8 million),the increase largely due to higher oil prices realised and lower operatingcosts. • Benefiting primarily from the stronger oil market, Dragongenerated net operating cash inflow of US$70.9 million (2003: US$55.4 million)and a year-end free cash balance of US$33.1 million. • The Board's assessment of remaining recoverable proved andprobable reserves in the Cheleken Contract Area, offshore Turkmenistan, as of31st December 2004, is 661 million barrels of oil and condensate. In addition,the Board's best estimate for contingent gross gas resources in the ChelekenContract Area is 3.5 trillion cubic feet. • Upon substantial progress being achieved on the execution ofthe Field Development Plan, it was decided to divide the responsibilities of theChief Executive Officer ("CEO") and the Chairman of the Board, and accordingly,Mr. Essa Almulla was appointed CEO of Dragon with effect from 18th October 2004. • The drilling campaign on the LAM 21 platform concluded with thecompletion and testing of a fourth successful well, 21/109. Followingrefurbishment of the LAM 10 platform, Dragon commenced drilling well 10/110, thefirst of a series of planned wells from this platform, on 25 December 2004. • Seven wells worked over during 2004 yielded excellent resultsand these wells are now contributing significantly to production. • Dragon has signed a contract for an initial two-year term withNational Drilling Company of Iran for the Iran Khazar jack-up rig. This rig isexpected to be mobilized in Quarter 2 2005 to replace the existing jack-up rigat the end of its contract period. Mr Hussain M. Sultan, Chairman, commented: "I am pleased to report significant progress during 2004 which augurs well forthe future of the company. In the second half of the year, total productionreached 20,532 bopd following a successful drilling and well workover programme. During 2004, Dragon continued the strategy of increasing production in itsCheleken Contract Area through investment in drilling and various developmentactivities including a successful workover programme. As a result, totalproduction reached 20,532 bopd in the second half with further growthanticipated. We expect the marine 3D seismic survey to deliver a much clearer picture of thefields' internal reservoir architecture. This is critical to identifying furtherdrilling targets that may lead to increased economic oil recovery from thefields. The results of the interpretation of the data will further enable Dragonto target geological sweet spots and help reduce the risks in drilling. Dragon continues to explore various sources of alternative financing options tofund its long term development plans. This remains an immediate priority forDragon in order to progress its continuous drilling programme and may include anequity placement or other form of equity fund raising in excess of 10% ofpresent issued share capital to fund capital expenditure for the ChelekenContract Area. Dragon's growth strategy includes looking at other areas of exploration andproduction to complement the activities in Turkmenistan." Enquiries: Dragon Oil plcHussain M. Sultan, ChairmanEssa Almulla, CEOTel: + 353 1 676 6693 Citigate Dewe RogersonMartin JacksonGeorge CazenoveTel: +44 020 7638 9571 Chairman's Statement Dear Shareholder, I am pleased to report significant progress during 2004 which augurs well forthe future of the Company ("Dragon"). In the second half of the year, totalproduction reached 20,532 barrels of oil per day ("bopd") following a successfuldrilling and well workover programme. I am also happy to announce that Mr. Essa Almulla was appointed Chief ExecutiveOfficer ("CEO") of Dragon with effect from 18th October 2004. In addition to myrole as Chairman, I was appointed CEO in February 2002 in order to commence theexecution of the Field Development Plan ("FDP"). Upon substantial progress beingachieved on the execution of the FDP, it was decided to divide theresponsibilities of the CEO and the Chairman of the Board. As CEO, Mr. Essa Almulla has the full support of the Board in progressing Dragonfor its benefit and in consequence the benefit of its shareholders. Reserves The underlying data in respect of the project is encouraging. The Board'sassessment of remaining recoverable proved and probable reserves in the ChelekenContract Area, offshore Turkmenistan comprising the two fields Dzheitun ("LAM")and Dzhygalybeg ("Zhdanov"), as of 31st December 2004, at 661 million barrels ofoil and condensate. Dragon's entitlement barrels under the Production SharingAgreement ("PSA") amount to 315 million barrels of oil and condensate. Inarriving at this estimation of Dragon's share, a number of assumptions includingthe extension of the PSA for a period of 10 years over the initial period of 25years have been made. Any changes to such assumptions could materially effectthe calculation of Belfast's share of proven and probable reserves under thePSA. The principal assumptions are oil price of USS$25 per barrel, forecastedcost and timing for capital expenditure and assumptions in relation toforecasted oil production profile. In addition, the best estimate for contingent gross gas resources for theCheleken Contract Area is 3.5 trillion cubic feet. 2004 Financial Results Dragon's turnover increased to US$97.1 million (2003: US$82.0 million). Highcrude oil prices and lower operating costs, primarily resulted in an increase ofpost-tax profits to US$49.7 million (2003: US$28.8 million). During the year, Dragon, benefiting primarily from the stronger oil market,generated a net operating cash inflow of US$70.9 million (2003: US$55.4 million)resulting in a year-end free cash balance of US$33.1 million (2003: US$47.8million). During the year, Dragon sold its crude production through Northern Iran underits swap agreement, and also at Baku. Dragon continues to obtain favourablenetback prices depending on the movement of crude oil based on price andlogistical considerations. Development The main activities for 2004 included completion of four wells from the upgradedLAM 21 platform using a jack up rig, and the workover of seven wells from twoexisting platforms. The LAM 21 platform drilling campaign concluded with the completion and testingof a fourth successful well, 21/109. The recently announced successfulre-entry, sidetrack and completion of the development well 21/106, was achieveddespite technical difficulties encountered in the first quarter of the year.Following refurbishment of the LAM 10 platform, Dragon commenced drilling well10/110, the first of a series of planned wells from this platform, on 25December 2004. Seven wells worked over during 2004 yielded excellent results and these wellsare now contributing significantly to production. Production Dragon's daily production reached 20,532 bopd, thus achieving the statedproduction target for 2004. The average field production in the second half ofthe year increased to 15,625 as compared to 10,879 in the first half. Thisincrease in production was due to the success of the continuous drilling andwork over programmes. The total field production from the Cheleken Contract Area for 2004 was 4.9million barrels of oil and the average gross production for the year was 13,264bopd with 8,630 bopd attributable to Dragon. This compares to 4.8 millionbarrels of oil in 2003 with a total gross production of 13,217 bopd, of which8,385 bopd was attributable to Dragon. 3D seismic Despite delays in the marine 3-D seismic survey resulting from adverse weatherconditions, the data acquisition of the LAM Field and western Zhdanov Field hasbeen completed. This data is under fast-track processing and will be used toselect the location of a new wellhead and production platform to be installed in2006 as part of the continuing field development. The 3-D seismic surveycontinues over the remaining part of the Zhdanov Field and is due to becompleted in 2005. Financing Dragon continues to explore various sources of alternative financing options tofund its long term development plans. This remains an immediate priority forDragon in order to progress its continuous drilling programme and may include anequity placement or other form of equity fund raising in excess of 10% ofpresent issued share capital to fund capital expenditure for the ChelekenContract Area. Strategy and outlook During 2004, Dragon continued the strategy of increasing production in itsCheleken Contract Area through investment in drilling and various developmentactivities The continuous drilling programme along with a well workover programme hasenabled Dragon to reach a production level in excess of 20,000 bopd. We lookforward to achieving further production growth in 2005. As the contract for theexisting jack-up rig expired in March 2005, a contract has been signed for anIranian jack-up rig for an initial term of two years to be mobilised as areplacement. We expect the marine 3D seismic survey to deliver a much clearer picture of thefields' internal reservoir architecture. This is critical to identifying furtherdrilling targets that may lead to increased economic oil recovery from thefields. The results of the interpretation of the data will further enable Dragonto target geological sweet spots and help reduce the risks in drilling. Associated gas from the field, which is currently largely flared and notexploited commercially, is considered a key resource. The Board believes thereis potential to add value by marketing natural gas. This will remain a keyobjective to be pursued by Dragon and will be developed as a separate projectafter positive feasibility. We have come a long way and are seeing the fruits of our endeavours, but thereis much more to do. We are guided by a clear strategy, with a talented andcommitted workforce. On behalf of the shareholders and my fellow Directors, Iwish to record my appreciation of the outstanding efforts made by the executiveteam and the staff. Hussain M. SultanChairman Chief Executive's Report I am pleased to report that Dragon's daily production reached 20,532 bopd, thusachieving the stated production target for 2004. The average field production inthe second half of the year increased to 15,625 bopd (the first half 10,879bopd) of which Dragon's entitlement barrels amounted to 10,664 bopd (the firsthalf 6,614 bopd). The 44% increase in production was due to the success of thecontinuous drilling and work over programmes in the second half of the year. Cheleken Offshore Dragon holds a 100% interest in, and is Operator of, a PSA for the ChelekenContract Area located in the Caspian Sea, offshore Turkmenistan. The ChelekenContract Area contains two producing oil and gas fields being LAM and Zhdanov.Development in the Cheleken Contract Area under the PSA commenced in May 2000and will take place over a 25-year base term. There is an exclusive right tonegotiate an extension to the PSA for a further period of not less than 10years. Drilling Well 21/106 was spudded on 18th November 2003 and was the first of four wells tobe drilled from the LAM 21 platform as part of the FDP. Due to drillingproblems, the well was sidetracked twice before being drilled to a total depthof 3,197 meters. Oil and gas bearing sands were logged in the upper reservoirzones 3, 4 and 5 but due to technical reasons, the well was plugged andtemporarily suspended. The well was sidetracked and re-entered on 17th October2004 and drilled to a depth of 3,093 meters. Well 21/106 tested at a rate of2,652 bopd from zones 3 and 4. The second well, 21/107 was spudded on 29th February, 2004 and was drilled to adepth of 4,264 meters. Oil and gas bearing sands were encountered in zones 4through 9. The well tested at a rate of 2,035 bopd from reservoir zones 7, 8 and9. Zone 4 was not flowed and tested at that time due to pressure differentials,and it is scheduled to be re-completed in 2005. The third well, 21/108 was spudded on 25 May 2004 and was drilled to a depth of3,222 meters in 34 days using rotary steerable drilling technology. Well 21/108encountered over 80 meters of oil/gas/condensate reservoirs in zone 4. Well 21/108 tested at a rate of up to 1,843 bopd from reservoir zones 3 and 4. Wirelinelogs indicate further production potential in reservoir zones 3, 4 and 5 whichwill be perforated and accessed at a future date after pressure stabilisation. The fourth well, 21/109 was spudded on 19 July 2004 and drilled to a depth of4,670 meters. Well 21/109 tested at a total rate of 5,330 bopd from zones 4 and9. The jack-up rig was mobilized to the refurbished LAM 10 platform and well 10/110was spudded on 25th December 2004. Dragon has signed a contract for an initial two-year term with National DrillingCompany of Iran for the Iran Khazar jack-up rig. The rig is expected to bemobilized in Quarter 2 2005 to replace the existing jack-up rig at the end ofits contract period. Workovers Well workovers during 2004 have yielded excellent results and these workoverwells are now contributing significantly to production. A total of seven wells were worked over. Additional perforations were added inall wells of which two wells were worked over with a hydraulic work-over unitfrom LAM 63. The workover of the eighth well, 86/86 did not yield expectedresults and was temporarily suspended due to technical reasons and the well maybe re-entered again in the future. Production The total field production for 2004 was 4.9 million barrels of oil and theaverage gross production for the year was 13,264 bopd with 8,630 bopdattributable to Dragon. This compares to 4.8 million barrels of oil in 2003 witha total gross production of 13,217 bopd, of which 8,385 bopd was attributable toDragon. Reserves The underlying data in respect of the Cheleken Contract Area remainsencouraging. The Board's view of the total remaining recoverable proved andprobable reserves (in the fields LAM and Zhdanov), as of 31st December 2004, are661 million barrels (2003: 641 million barrels) of oil and condensate. Dragon'sentitlement barrels under the PSA amount to 315 million barrels of oil andcondensate as of 31st December 2004 (2003: 356 million barrels). In addition,the best estimate for the field's contingent gross gas resources is 3.5 trillioncubic feet. The increase in the total oil reserves was due to certification of the ChelekenField Extension Area. A recent study has concluded that the existing onshoreCheleken field extends into the Contract Area operated by Dragon. Reservesassociated with the Cheleken Field Extension have been certified and developmentof the Cheleken Field Extension is planned for a later point. The decrease inthe Dragon's entitlement however, was due to an increase in the long-termforecast of oil price, as applied by the Board, in the calculation of Dragon'sshare of reserves pursuant to the terms of the PSA. The decrease in theentitlement barrels by application of a higher oil price, however, results in ahigher net present value of the reserves attributable to Dragon. Engineering & Construction During the year, Dragon completed substantial engineering projects in the LAMfield as part of the FDP. These included the refurbishment of the LAM 21platform, connection of a sub sea pipeline and engineering for a new productionplatform. The LAM 21 platform was refurbished and strengthened to accommodate a jack-uprig. A sub-sea pipeline, to take the production of up to four new wells from theLAM 21 platform to the Block II riser platform, was installed. Following the LAM 21 programme, the LAM 10 platform was also refurbished toaccommodate a jack-up rig and to drill further wells. A sub-sea infield pipelinefrom LAM 10 was also installed. Other major projects initiated include theengineering and construction of a LAM A wellhead and production platformtogether with an onshore processing facility. The processing facility is beinglocated onshore and is being designed to process up to 50,000 bopd. Both theplatform and the processing facility are planned to be commissioned in 2006. Marketing Dragon has the unrestricted right to market and export its share of oil underthe PSA. The marketing objective of Dragon is to ensure the smooth, safe anduninterrupted transportation of crude oil to international markets and toachieve best netback prices for its share of production. Since 1998, Dragon has been marketing its oil production through a crude oilswap agreement with the National Iranian Oil Company. Under this agreement,Dragon transfers its crude oil at Hazar, Turkmenistan and ships it to theCaspian port of Neka, in northern Iran. Dragon then receives an equal swapvolume of Iranian crude oil from Kharg Island, in southern Iran, for marketingto international third parties. Since December 2001, a second crude marketingroute has been established through Baku, Azerbaijan and a third route throughthe port of Makhachkala, Russian Federation on the basis of transportationtenders. Constant efforts are being taken to further reduce the cost per barrel of movingcrude oil from the Caspian Sea to international markets either via Iran,Azerbaijan or Russia. Dragon continues to obtain favourable netback pricesdepending on the movement of crude oil based on prices and logisticalconsiderations. In 2004, Dragon sold a total of 2.8 million entitlement barrels under the PSA ofwhich 1.6 million barrels (2003: 1.6 million barrels) were sold at Kharg Islandin the south of Iran under its swap agreement and 1.2 million barrels (2003: 1.6million barrels) at Baku. Health Safety & Environment Dragon has maintained its drive towards enhancing the general HSE standardswithin all sectors of its operations; to this effect Dragon has dedicatedadditional resources in terms of manpower and material and focused on enhancingthe quality of assistance provided to operations. Such efforts were manifested by pursuing firmly the company's training plan aswell as enhancing personnel's awareness to safety reporting. The environmental campaign and projects have been pursued as planned. The airquality monitoring campaign for LAM 21 was satisfactorily completed in 2004. Inaddition, an Environment Impact Assessment and action plan was developed for theLAM 10 project. During 2004 the lost time incident rate figure rose compared to the previousyear mainly due to the re-categorization of incident reporting and safetyperformance parameters, in order to reflect a more accurate status of incidents.There is no room for complacency in our drive for zero accidents and incidents.We are encouraged by our improved safety performance and will continue topromote excellence in safety practices throughout our business. Essa AlmullaChief Executive Officer Financial Report Dragon Oil plc, an Irish public limited company, and its subsidiaries, form anenergy Group actively developing, oil and gas reserves in Turkmenistan. The Company's shares are listed on the Irish and London Stock Exchanges. Thisfinancial review is intended to assist in the understanding of the results ofthe Group's operations for the year ended 31st December 2004 and of itsfinancial position at that date. The consolidated financial statements and notes contain additional informationand should be referred to in conjunction with this financial review. They havebeen prepared in accordance with applicable Irish law. Cash flow and net debt The net cash inflow from operating activities during 2004 was US$70.9 million(2003: US$55.4 million). The increase in cash inflow from operating activitiesis a direct result of increased sales revenue generated in the year throughhigher sales prices and lower operating costs. During the year, US$76.1 million (2003: US$20.6 million) was spent in acquiringtangible fixed assets, mainly attributable to the drilling and well workoverprogramme. At the end of 2004, the total bank and cash balances amounted to US$39.4 million(2003: US$52.2 million). At the year-end, total debt amounted to US$73.5 million (2003: US$75.2 million).The net debt, after reducing the Bank and Cash balances, was US$34.1 million(2003: US$23.0 million). On 3rd May 2004, the majority shareholder, Emirates National Oil Company Limited(ENOC) LLC ("ENOC"), provided a new loan facility of US$40 million. Its term isfor one year repayable on 3rd May 2005. The proceeds of this new loan wereutilised to repay the then existing US$40 million loan made by ENOC. This newloan carries an interest rate of LIBOR plus 325 basis points. There were no further drawdowns during the year under the European Bank forReconstruction and Development ("EBRD") loan facility. In February 2004, US$1.7million of the principal was repaid following the sixth borrowing base review.The net proceeds of the EBRD loan at 31st December 2004 were US$32.4 millionafter deducting financing costs of US$1.1 million. Interest is charged onoutstanding amounts at LIBOR plus 325 basis points. Subsequent to the year endin February 2005, a further US$0.5 million of principal was repaid and isaccordingly reclassified as amounts due within one year, together with an amountof US$5.4 million due to be repaid in August 2005 under the loan amortisationschedule. Turnover and profits Turnover in 2004 was US$97.1 million compared with US$ US$82.0 million for 2003.The increase of US$15.1 million is attributed to better prices (US$24.8 million)realised during the year, partly offset by lower volumes (US$9.7 million) sold.Dragon's share of production under the PSA increased during the year to anaverage of 8,630 bopd from 8,385 bopd in 2003. Reduction in the unit operating and production costs led to a decrease in coststo US$20.1 million in 2004 from US$27.8 million in 2003. This decrease wasprimarily due to savings in certain operating costs and year-end stock movement. Consequent to the revision in rates due to an increase in the long-term oilprice forecast applied by the Board in the calculation of reserves under thePSA, the Depreciation Depletion and Amortisation ("DD&A") charge for the year2004 was US$16.7 million (2003: US$13.5 million). Accordingly, a gross profit of US$60.3 million was recorded against US$40.7million for 2003. Administration costs were US$5.4 million in 2004 compared to US$4.2 million in2003, primarily on account of increased overhead costs, partly offset by a lowercharge for the oil hedge in 2004. Interest payable and similar charges amounted to US$7.3 million (2003, US$8.4million) primarily due to a lower ENOC loan arrangement fee. Profit after taxation and earnings per share Dragon made a post tax profit of US$49.7 million in 2004 compared to a post taxprofit of US$28.8 million in 2003. The basic earnings per share amounted to12.31 cents compared to an earning of 7.89 cents per share in 2003. In view of the implementation of the ongoing FDP and Dragon's financialcommitments, the Directors do not recommend a dividend for the year. Capital Expenditure Programme Fixed assets increased by US$72.4 million from US$269.6 million in 2003 comparedto US$342 million in 2004. This was due to the completion of the drillingcampaign from the LAM 21 platform in January 2005, commencement of the drillingprogramme from the LAM 10 platform with a jack-up rig, in line with the FDP inDecember 2004. The increase in tangible fixed assets of US$89.1 million, mainlydue to capital expenditure incurred on the LAM 21 platform drilling programme,is largely offset by the DD&A charge of US$16.7 million. Commercial Risks The main commercial risks Dragon is exposed to are oil price, exchange rate,counterparty and liquidity risks in its operations. Wherever possible, Dragonattempts to minimise the impact of such commercial risks. Counterparty risks are minimised through short-term crude oil sale contracts andprepayments received for the cargoes moving west to Baku. Dragon receipts and expenditures are mainly in US dollars which minimise theexchange rate risks. Dragon also seeks to retain sufficient liquidity, either inthe form of cash or maturing deposits to manage its ongoing FDP. In line with managements' strategy to hedge the oil price Dragon has enteredinto an oil put option contract at a strike price of US$ 28 per barrel for anestimated 60 per cent of its entitlement barrels for 2005. Group Profit & Loss Account Year ended Year ended 31-Dec-04 31-Dec-03 US$'000 US$'000 Turnover 97,074 82,025 Cost of salesOperating and production costs (20,151) (27,761) Depletion and depreciation (16,596) (13,521) Gross profit 60,327 40,743 Administrative expenses (5,383) (4,181)Other income 2,115 742 Operating profit 57,059 37,304 Interest payable and similar charges (7,314) (8,389)Loss on sale of investment - (132) Profit on ordinary activities before taxation 49,745 28,783 Taxation on profit on ordinary activities - - Profit for the financial year 49,745 28,783 Earnings per shareBasic 12.31c 7.89cFully diluted 12.17c 7.83c The results for both years have been derived from continuing operations. Nogains or losses were recognised in the years to 31 December 2004 and 31 December2003 other than those reflected in the above profit and loss accounts. Group Balance Sheet 31-Dec-04 31-Dec-03 US$'000 US$'000 Fixed assetsTangible assets 341,974 269,612 Current assetsStocks 13,538 4,733Debtors 5,551 5,756 Cash at bank and in hand 39,437 52,203 58,526 62,692 CreditorsAmounts falling due within one year (79,713) (55,698) Net current (liabilities)/assets (21,187) 6,994 Total assets less current liabilities 320,787 276,606 CreditorsAmounts falling due after more than one year (26,547) (32,214) Net assets 294,240 244,392 Capital and reservesCalled-up equity share capital 66,335 66,274Share premium account 72,688 72,646Capital redemption reserve 77,150 77,150Profit and loss account 78,067 28,322Total equity shareholders' funds 294,240 244,392 Group Cash Flow Statement Year ended Year ended 31-Dec-04 31-Dec-03 US$'000 US$'000 Net cash inflow from operating activities 70,857 55,361 Returns on investments and servicing of financeInterest received 388 144Foreign exchange gain 1,313 -Interest and arrangement fees paid (7,673) (7,290)Net cash outflow from returns on investments and servicing (5,972) (7,146)of finance Capital expenditure and financial investmentPayments to acquire tangible fixed assets (76,054) (20,558)Receipts from sale of investment - 1,591 Net cash outflow from capital expenditure and financial (76,054) (18,967)investment Cash (outflow)/inflow before management of liquid (11,169) 29,248resources and financing Management of liquid resourcesNet funds (deposited into)/withdrawn from the interest (7) 62collateral accountNet funds deposited into the decommissioning fund (2,162) (2,326)Net funds withdrawn from/(placed on)deposit 251 (1,250)Net cash outflow from management of liquid resources (1,918) (3,514) FinancingIssue of equity capital 103 19,127Issue costs paid - (1,147)Repayment of loans (1,700) (13,100) Net cash (outflow)/inflow from financing (1,597) 4,880(Decrease)/increase in cash (14,684) 30,614 Certain corresponding figures have been reclassified, where necessary, for thepurpose of comparison. Notes to the Consolidated Financial Statements for the year ended 31 December2004 1. The results for the year ended 31 December 2004 do not constitutefull accounts within the meaning of Section 3 of the Companies (Amendment) Act,1987. 2. In view of the implementation of the ongoing FDP and Dragon'sfinancial commitments, the Directors do not recommend a dividend for the year. 3. The year-end cash balance was US$39.4 million with totalborrowings of US$73.5 million compared with US$52.2 million and US$$75.2 millionat the end of 2003. 4. The borrowings of US$75.2 million include a loan of US$40 millionrepayable to ENOC. This loan is included in the accompanying Balance Sheet increditors - amounts falling due within one year. The ENOC loan is repayable on 3 May 2005. The loan carries aninterest rate of LIBOR plus 325 basis points and carries an arrangement fee ofUS$3.25 million and a facility fee of US$0.25 million. 5. The net cash inflow from operating activities during 2004 wasUS$70.9 million (2003: US$55.4 million). Interest and arrangement fees paidamounted to US$7.7 million (2003: US$7.3 million). 6. The Group operates a single class of business being oilexploration, production and related activities within a single geographicalarea. 7. Earnings per Share The calculations of earnings per share are based on the followingprofit and weighted average number of shares: The calculations of earnings per share are based on the following profit and numbers of shares: Year ended Year ended 31-Dec-04 31-Dec-03 US$'000 US$'000 Profit for the year 49,745 28,783 Weighted average number of shares: Basic 404,146,357 364,925,723 Fully diluted 408,705,476 367,746,267 8. Further information regarding Dragon is available on theCompany's website, www.dragonoil.com 4 April, 2005 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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