Technical issues hit Dragon Oil

LONDON-listed Dragon Oil said yesterday it was likely to undershoot its production growth target in 2009 because of technical problems, adding its talks with majority shareholder Emirates National Oil Company (Enoc) about a possible takeover bid were ongoing.<br /><br />The Dubai-based company said gross output growth for the full year will likely be below the annual 15 per cent level which the company is aiming for between 2009-11.<br /><br />Net profits dropped 37 per cent to $105m (&pound;64m) in the first half of 2009, on the back of lower oil prices.<br /><br />&ldquo;The results today are disappointing in regard to the group&rsquo;s statement that it will undershoot its production growth target,&rdquo; said Ed Woolfitt, head of trading at Galvan Research.<br /><br />The company added that one well had encountered operational problems and another had failed to produce as much oil as expected.<br /><br />But Dragon, which focuses on production in the Central Asian state of Turkmenistan, said it was maintaining its three-year target.<br /><br />In June, the group said it received a takeover approach from state-owned Enoc, also from Dubai. Enoc said it wanted to pay a &ldquo;modest&rdquo; premium on Dragon&rsquo;s share price before its approach, something which minority investors in the company said they would not welcome.