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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Dragon Oil | LSE:DGO | London | Ordinary Share | IE0000590798 | ORD EUR0.10 |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 798.50 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
RNS Number:3410K Dragon Oil PLC 24 April 2003 DRAGON OIL PLC ("DRAGON or the Company") PRELIMINARY ANNOUNCEMENT OF RESULTS FOR 2002 Dragon Oil Plc, the international oil and gas exploration and production Company, today announced its results for the year ended 31st December 2002. Highlights to date: * A total of 4 wells (LAM22/102-103-104-105) were drilled and completed during 2002 and one (LAM22/101) successfully worked over. * The average gross production from the Cheleken Contract Area for the year was 10,383 barrels of oil per day ("bopd") (2001: 6,730 bopd) * Dragon recorded a post tax profit of US$15.5 million (2001, post tax loss of US$ 5.4 million). * The Company made a further drawdown of US$16.3 million during the year from European Bank for Reconstruction and Development ("EBRD"). In May 2002, Emirates National Oil Company Ltd (ENOC) L.L.C. ("ENOC") granted a loan of US$50 million for a period of one year, to enable Dragon to meet it's subsidiary's (Dragon (Holdings) Limited), loan repayments due to Standard Chartered Bank ("SCB") in May and November 2002 totalling US$45.5 million. * In line with the Company's short term cash requirements, the Company has renegotiated the position with ENOC who have agreed to provide a new loan facility of US$40 million for a period of one year that will result in a net repayment of US$10 million of the original US$50 million loan on 3rd May 2003. Hussain M Sultan, Chairman of Dragon, said: "I would like to congratulate everyone in the Company for the hard work put in and for working as one team. Last year the focus was on reorganisation, cost reduction, drilling operations, improving the efficiency and performance of the Company. We achieved the 2002 production target despite many constraints. We have made a good beginning working as a team, but have a long and tough road ahead of us. Success never comes easy. This year we have to work towards maximisation of the field production to achieve its full current potential and execute the 2003 work programme efficiently and in a cost-effective manner." Drilling programme & results from production Following the first well, the second development well LAM22/102 was spudded on 8th August 2001 and brought on stream in February 2002 at an initial rate of about 3,200 bopd. The third well LAM22/103 was completed in June 2003 and two of the intervals tested aggregate rates of approximately 3,700 bopd. The testing of well LAM22/104 was completed in October 2002 in five zones. The well was tested at a cumulative rate of 3,956 bopd. LAM 22-105, the fifth and last well to be drilled from Lam 22 platform, was completed in December 2002, and tested at a cumulative rate of 9,464 bopd from three intervals. The total field production for 2002 was 3.8m barrels and the average gross production from the Cheleken Contract Area for the year was 10,383 bopd with 5,778 bopd attributable to Dragon. This compares to a total gross production of 6,730 bopd in 2001, of which 2,435 bopd was attributable to Dragon. Financing programme During the year, we made a further drawdown of US$16.3 million from the facility of EBRD, consequent to a borrowing base review. In May 2002, ENOC and Dragon Oil Plc agreed and executed a loan agreement for $50 million to enable Dragon Oil Plc's subsidiary Dragon (Holdings) Limited to meet the loan repayments due to SCB in May and November 2002 totalling US$45.5 million. The term of the loan was for a period of one year, repayable on 3rd May 2003. In line with our short term cash requirements we have renegotiated our position with ENOC who have agreed to provide a new loan facility of US$40 million for a period of one year that will result in a net repayment of US$10 million of the original US$50 million loan on 3rd May 2003. Therefore, the sourcing of alternative financing remains a critical and immediate priority for Dragon. Management is seriously looking at appropriate long term financing opportunities to take the Company forward into an aggressive field development plan to exploit the resources to the fullest. We are currently looking at the most appropriate way to maximise shareholder return, retire the existing debt and provide capital for the field development plan. Enquiries: Dragon Oil (+353 1 676 6693) Hussain Sultan, Chairman & Acting Chief Executive Officer Citigate Dewe Rogerson (+44 020 7638 9571) Martin Jackson / Sara Thomas Chairman's Statement Dear Shareholder, I am pleased to report that 2002 was a successful year for Dragon. We met the challenges in the field, made significant progress in the redevelopment of the LAM field in terms of drilling and completion of 4 wells in 2002, and the additional production from these wells, together with higher crude oil prices in the international market, control of financial and other costs, resulted in a post-tax profit of US$ 15.5 million. I continue to hold the additional responsibility of Chief Executive Officer since early in 2002 and with my new management team have achieved our targets in 2002. We effectively utilised our resources, concentrating on increasing production and reducing costs. 2002 Activities Well LAM 22-105 tested at a cumulative rate of 9,464 bopd from three intervals. The completion of this last well on LAM 22 saw Dragon exceed its stated production target of 15,000 bopd by December 2002. Four new wells (including LAM 22-105) were brought into production during the year. We have recognised areas that caused earlier overruns in the drilling programme and continue to set ourselves challenging production and cost reduction targets. The total field production for 2002 was 3.8m barrels and the average gross production for the year was 10,383 bopd with 5,778 bopd attributable to the Dragon. This compares with the average gross production of 6,730 bopd in 2001 of which 2,435 bopd was attributable to Dragon. The oil and gas assets held by the Company are substantial and have enormous potential with the latest estimate by an independent consultant putting the total recoverable proven & probable reserves at 680 million barrels of oil and condensate. In addition, the Cheleken block contains best estimate contingent gross gas resources of 3.57 trillion cubic feet. Safety continues to be our top priority and we achieved a very low lost work-time rate for both Company staff and contractors, which is commendable considering the level of construction, drilling and field operation activities. We will strive for further improvements in Health, Safety and Environment in the coming year. Marketing of crude production continued through Northern Iran under the swap arrangement and as alternative routes crude has also been sent to Baku and Makhachkala. We continue to evaluate options to determine the most economical route for our crude. During the year, we made a further drawdown of US$16.3 million from the facility of the EBRD, consequent to a borrowing base review. In May 2002, ENOC and Dragon Oil Plc agreed and executed a loan agreement for $50 million to enable Dragon Oil Plc's subsidiary Dragon (Holdings) Limited to meet the loan repayments due to SCB in May and November 2002 totalling US$45.5 million. The term of the loan was for a period of one year, repayable on 3rd May 2003. In line with our short term cash requirements we have renegotiated our position with ENOC who have agreed to provide a new loan facility of US$40 million for a period of one year that will result in a net repayment of US$10 million of the original US$50 million loan on 3rd May 2003. Therefore, the sourcing of alternative financing remains a critical and immediate priority for Dragon. Looking forward 2003 The economic climate for our business remains uncertain and we expect continuing volatility in crude prices. We would be resilient against lower oil prices in 2003 and are well placed to benefit from any upturn in prices in the world's energy markets with respect to our limited production levels. Within the limitations of the forecasted cash flow for the year 2003, the Company is continuing with a minimum capital expenditure programme for the development of the field. There are plans to drill the first of six new wells, under the planned continuous drilling programme, from a new platform LAM A, by the end of the year. We expect the average field production for 2003 to be over 13,000 bopd despite the decline rates and bottlenecks in the field. As we have ended drilling from Lam 22, we continue to look for alternative utilisation options for our land rig. We are in the process of securing a jack-up rig for a short-term in 2003/04 to maximise the exploitation of the oil reserves in our Contract Area. The Board will continue to seek alternative long-term funding proposals, which remains critical to our continued success. Our aims are to continue with drilling under the phase I development programme, subject to further funding becoming available to maximise shareholder return, retire the existing debt and provide capital for the field development plan. In the meantime, under our long-term facility with EBRD, further funding is available to continue development, but it is subject to us continuing to meet our obligations under the borrowing agreement and loan drawdown criteria. We will continue to fulfil our commitments to the government and the people of Turkmenistan under the Production Sharing Agreement based on sound business principles, and have already embarked on employing more qualified and capable Turkmenistan nationals. I would like to congratulate everyone in the Company for the hard work put in and for working as one team. Last year the focus was on reorganisation, cost reduction, drilling operations, improving the efficiency and performance of the Company. We achieved the 2002 production target despite many constraints. We have made a good beginning working as a team, but have a long and tough road ahead of us. Success never comes easy. This year we have to work towards maximisation of the field production to achieve its full current potential and execute the 2003 work programme efficiently and in a cost-effective manner. Shareholders should realise that we are faced with a number of operational and geopolitical issues. However, we are optimistic that by acting in a professional manner we can deliver returns to our shareholders. The contribution of all involved, including our suppliers, bankers, contractors and stakeholders is essential to ensure Dragon's long term financial stability and success and is essential to build upon the platform of the achievements of 2002. Hussain M Sultan Chairman of the Board Operations Review Highlights: * A total of 4 wells (LAM22/102-103-104-105) were drilled and completed during 2002 and one (LAM22/101) successfully worked over. * The average gross production from the Cheleken Contract Area for the year was 10,383 bopd and Dragon's share increased to 5,778 bopd. * After LAM22/105 was completed, Rig 40 was demobilised from Lam 22 production platform and laid down in the harbour area. * Lost time accident frequency rate ("LTAI") decreased from 0.45 to 0.25 Dragon Oil (Turkmenistan) Ltd holds 100% equity in, and is operator of, the Cheleken Contract Area, in the Caspian Sea offshore Turkmenistan. The Cheleken ' block' contains two producing oil and gas fields LAM and Zhdanov, and is operated under a Production Sharing Agreement (PSA) which became effective on 1st May 2000. Drilling Following of the first well, the second development well LAM22/102 was spudded on 8th August 2001 and brought on stream in February 2002 at an initial rate of about 3,200 bopd. The third well LAM22/103 was completed in June 2003 and two of the intervals tested aggregate rates of approximately 3,700 bopd. The testing of well LAM22/104 was completed in October 2002 in five zones. The well was tested at a cumulative rate of 3,956 bopd. LAM 22-105, the fifth and last well to be drilled from Lam 22 platform, was completed in December 2002, and tested at a cumulative rate of 9,464 bopd from three intervals. Production The total field production for 2002 was 3.8m barrels and the average gross production from the Cheleken Contract Area for the year was 10,383 bopd with 5,778 bopd attributable to Dragon. This compares to a total gross production of 6,730 bopd in 2001, of which 2,435 bopd was attributable to Dragon. Engineering & Construction During the year, Dragon completed the engineering of its first new production platform in the Lam field and the subsea pipeline required to connect this to the existing infrastructure. Reserves The underlying data in respect of the project remains encouraging; with the latest estimate by an independent consultant putting the total recoverable proven & probable reserves at 680 million barrels of oil and condensate. In addition, the Cheleken block contains best estimate contingent gross gas resources of 3.57 trillion cubic feet. Marketing Under its swap agreement Dragon sold approximately 1.08 million barrels (2001, approximately 0.77 million barrels) at Kharg Island in the South of Iran. Further sales from the Cheleken Contract Area of approximately 1.05 million barrels (2001, 0.19 million barrels) were made to west and north of the Caspian to Baku and Makhachkala. Arbitrage between Urals (Med) and Dubai/Oman was very volatile during 2002 which made it very challenging to spread the risks between Southern and Western routes. However, Dragon constantly monitored the Urals/ Dubai spread which enabled the Company to achieve the best price through alternating the routes in accordance with the market arbitrage. Safety During 2002 one LTAI was recorded. Prior to this accident, drilling had 426 days without LTAI. Safety continues to be a top priority and Dragon achieved a LTAI of 0.25 for both Company staff and contractors, which is good considering the level of construction, drilling and field operation activities taking place. Throughout the coming year further improvements will be made including the implementation of an integrated Health Safety and Environment ("HSE") management system and continued staff training. Group Profit & Loss Account Year ended Year ended 31 December 2002 31 December 2001 US$'000 US$'000 Turnover 50,593 22,248 Cost of sales Operating and production costs (21,060) (19,011) Depreciation and depletion (6,111) (2,455) Gross profit 23,422 782 Administrative expenses (3,363) (2,617) Other income 805 213 Operating profit/(loss) 20,864 (1,622) Interest payable and similar charges (7,870) (3,811) Profit on sale of investments 2,528 - Profit/(loss) on ordinary activities before taxation 15,522 (5,433) Taxation on profit on ordinary activities - - Profit/(loss) for the financial year 15,522 (5,433) Earnings/(loss) per share Basic 4.29c (1.53)c Fully diluted 4.28c (1.52)c The results for both years have been derived from continuing operations. No gains or losses were recognised in the years to 31st December 2002 and 31st December 2001 other than those reflected in the above profit and loss accounts. Group Balance Sheet 31 December 2002 31 December 2001 US$'000 US$'000 Fixed assets Tangible assets 265,165 239,532 Current assets Stocks 5,867 6,846 Debtors 10,554 2,467 Investment 1,723 - Cash at bank and in hand 18,075 12,342 36,219 21,655 Creditors Amounts falling due within one year (66,878) (58,515) Net current liabilities (30,659) (36,860) Total assets less current liabilities 234,506 202,672 Creditors Amounts falling due after more than one year (36,877) (20,565) Net assets 197,629 182,107 Capital and reserves Called-up equity share capital 61,142 138,292 Share premium account 109,374 109,374 Capital redemption reserve 77,150 - Profit and loss account (50,037) (65,559) Total equity shareholders' funds 197,629 182,107 Group Cash Flow Statement Year Ended Year Ended 31 December 2002 31 December 2001 US$'000 US$'000 Net cash inflow from operating activities 24,215 7,567 Returns on investments and servicing of finance Interest received 118 326 Interest paid (7,682) (3,774) Net cash outflow from returns on investments and servicing of finance (7,564) (3,448) Capital expenditure and financial investment Payments to acquire tangible fixed assets (31,744) (38,699) Receipts from sale of investments 26 - Net cash outflow from capital expenditure and financial investment (31,718) (38,699) Financing Issue of ordinary share capital, net of expenses - 5,768 Repayment of loan (45,500) - Debt drawdown 66,300 29,500 Net cash inflow from financing 20,800 35,268 Increase in cash 5,733 688 Certain corresponding figures have been reclassified, where necessary, for the purpose of comparison. Dragon Oil plc Notes to the Preliminary Announcement for the year ended 31st December 2002 1. The results for the year ended 31st December 2002 do not constitute full accounts within the meaning of Section 3 of the Companies (Amendment) Act, 1987. 2. There remains a substantial deficit on distributable reserves and so the Directors do not expect to recommend a dividend for the year. 3. The year-end cash balance was US$18.1 million with total borrowings of US$88.3 million compared with US$12.3 million and US$67.5 million at the end of 2001 respectively. 4. The borrowings of US$88.3 million include a loan of US$50 million repayable to ENOC. This loan is included in the accompanying Balance Sheet in creditors - amounts falling due within one year. Furthermore, Dragon have renegotiated the position with ENOC who have agreed to provide a new loan facility of US$40 million for a period of one year that will result in a net repayment of US$10 million of the original US$50 million loan on 3rd May 2003. The new loan will be repayable on 3rd May 2004, at an interest rate of LIBOR plus 3.25%. The loan carries an arrangement fee of US$3.5 million. 5. The net cash inflow from operating activities during 2002 was US$24.2 million (2001, US$ 7.6 million). Interest charges amounted to US$7.7 million (2001: US$3.8 million). 6. Earnings/(Loss) per Share The calculations of Earnings/ (Loss) per share are based on the following Profit/ (Loss) and weighted average number of shares: Year ended Year ended 31 December 2002 31 December 2001 US$'000 US$'000 Profit/(loss) for the year 15,522 (5) Weighted average number of shares : Basic 362,153,116 355,927 Fully diluted 362,267,870 357,876 7. Further information regarding Dragon is available on the Company's website, www.dragonoil.com This information is provided by RNS The company news service from the London Stock Exchange END FR SELFDLSDSESL
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