Dragon Oil First-Half Net Rises 34% on Record Crude

By Maren Naess Olsen

Aug. 22 (Bloomberg) -- Dragon Oil Plc, the Dubai-based petroleum producer with operations in Turkmenistan, said first- half profit gained 34 percent as crude prices rose to a record.

Net income advanced to $167 million, or 32.3 cents a share, from $124 million, or 24.3 cents, a year earlier, Dragon said today in a statement distributed by the Regulatory News Service. That missed analyst estimates of $182 million at Goodbody Stockbrokers and beat estimates of $165 million at Renaissance Capital.

Oil producers have benefited from rising prices for crude, which climbed above $140 a barrel for the first time in June after almost doubling from a year earlier.

``Dragon Oil has performed strongly both operationally and financially,'' Executive Chairman Hussain M. Sultan said in the statement. ``Dragon Oil will achieve both its drilling and its production targets.''

Dragon rose as much as 25.5 pence, or 8.2 percent, to 337.5 pence in London trading, which would be its highest close since July 18, and traded 6.7 percent up at 333 pence at 8:43 a.m. local time. It has a market value of 1.70 billion pounds ($3.2 billion).

The company, which aims to produce 40,000 barrels a day by the end of the year, said it achieved a peak production rate of 43,227 barrels a day in June.

Sales rose 63 percent to $373.5 million, while average gross production advanced 36 percent to 38,482 barrels of oil a day, according to the statement. Dragon booked a one-time expense of $91 million on a hedge, which capped its oil sale price at $102 a barrel.

Turkmen Production

The company is developing the Cheleken Contract Area in the Caspian Sea off Turkmenistan, a Central Asian nation that's gradually opening up to foreign investment. Dragon signed a production-sharing contract with the Turkmen government in 2000.

At the end of December, Dragon bought stakes in several fields in Yemen from Virgin Resources Ltd. to expand its production base.

Emirates National Oil Co., wholly owned by the government of Dubai, has a 52 percent stake in Dragon Oil.

To contact the reporter on this story: Maren Naess Olsen in London molsen10@bloomberg.net