Dragon Oil reports production increase and plans 10 per cent growth by 2012

DRAGON Oil yesterday reported a nine per cent increase in daily output for the first quarter of this year.

The oil and gas explorer increased daily production to 47,654 barrels and said it was “satisfied that there is sufficient capacity in existing marketing routes to satisfy current production”.

Dragon said that another three development wells had come on stream in the first quarter and capital expenditure in the period was $67m (£43m), against $81m in the same period last year.

Net cash at the end of the quarter was $1.1bn, with no debt, it added.

Looking ahead, Dragon said it was working towards completing 11 new development wells and up to three sidetracks in 2010, and expects to achieve average production growth of 10 per cent to 15 per cent over the three years to 2012.

The firm also announced yesterday that it had agreed a short-term crude swap deal with Iran.

The new deal ends uncertainty after an existing long-term deal, that ended in March, was in danger of not being renewed.