Dragon Oil has produced a mixed set of half-year results with the upward trend in production undermined by higher administrative expenses. Shareholders will probably be content given the size of the interim pay-out, and a $200m (£127m) share buy-back in the offing, but this largesse is unlikely to be repeated, as the group is intent on utilising its huge cash resources to diversify its production base away from Turkmenistan.
Comparative gross output over the period was up 10.7 per cent to 64,200 barrels of oil per day (bopd). On a working interest basis, this works out as 11.7m barrels of crude compared to 10.5m barrels in the comparative period in 2011. Progress continues, with output hitting 70,017 bopd by the second week of August.
The increased production allowed Dragon to increase comparable first-half sales by 18 per cent to 5.8m barrels of crude oil, while realised prices, though volatile through the period, increased marginally to $102 a barrel. Nevertheless, operating profits at $3.12bn were broadly flat due to a $59.6m increase in cost of sales due to a higher depletion charge and field costs.
Dragon maintained its production growth guidance of 10-15 per cent annually through 2012-15, with plateau production of 100,000 bopd expected by the end of the period. Goodbody upgraded its adjusted 2012 EPS slightly and now expects flat EPS of 60.3¢.
| DRAGON OIL (DGO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 601p | MARKET VALUE: | £2.98bn | |
| TOUCH: | 601-602p | 12-MONTH HIGH: | 656p | Low: 425p |
| DIVIDEND YIELD: | 2.8% | PE RATIO: | 7 | |
| NET ASSET VALUE: | 563¢ | NET CASH: | $2.02bn | |
| Half-year to 30 June | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2011 | 527 | 416 | 60.0 | 9 |
| 2012 | 588 | 414 | 60.5 | 15 |
| % change | +12 | - | +1 | +67 |
Ex-div: 22 Aug Payment: 20 Sep £1:$1.57 | ||||
