First ever post...! Dragon Oil, I have done well with this share in the last two months but now it is heading for the weeds. I have hunted the news for clues but have found nothing. Anyone got any ideas or thoughts on this stock?

Shorts should start to think about their positions again. Is there a bid coming?

Any news?

DGO has gone up over 8% today - I dont see any news out, does any one know the low down?

Dragon seemed to have topped out. Or have they? I am tempted to sell, and take my profit. Any input would be appreciated.

I am not selling before 2.5 very undervalued at this price compared to the rest of the market. Should be getting news in the comming weeks about well 10/110......watch this space.

well no sooner as I posted about news and RNS is realeased check it out :-) am buying more!!

Dragon Oil PLC
12 October 2005

PRESS RELEASE
DRAGON OIL plc

('Dragon')

WELL LAM10/111 STARTS PRODUCTION

Dragon is pleased to announce that well LAM 10/111 on the refurbished LAM 10
platform in the Cheleken Contract Area, offshore Turkmenistan, has tested oil
from Zones 4, 5 and 6 at a combined rate of 2,586 barrels of oil per day,
('bopd').

Well 10/111 was spudded on 19th July 2005 and drilled to a total depth of 3,544m
MD (measured depth) in reservoir Zone 7. The well was successfully completed
using dual completion which enables two reservoir intervals, at different
reservoir pressures, to be produced simultaneously. This is the first time that
Dragon has used dual completion technology.

Reservoir Zones 4 (lower part), 5 and 6 were produced through the lower
completion string and tested at a rate of 1,506 bopd. The upper part of
reservoir Zone 4 was produced through the upper completion string and tested at
a rate of 1,080 bopd. Both intervals will be produced together.

The Iran Khazar jack-up rig has been skidded to commence drilling the third well
from the LAM 10 platform, well LAM 10/112. This well is planned to be drilled to
a total depth of around 3,600 metres.

Hussain M. Sultan, Chairman of Dragon commented:

'We are pleased with the result of well LAM 10/111 and with the successful
application of dual completion technology. It is planned to use this technology
on future wells.'

Ends

Heading for higher oil production. It worth every penny they spend.

Was that a tree shake this morning, any views

Looks like it, I am not selling.

Nor i,Dgo only started fresh drilling afew days ago to increase production.

Recovering very nicely now.

time to add IMO

where is the support level for dgo IMHO it looks around the 115p mark can see this shortly

15p is better as we can buy it together. lol

While I am normally against reproducing other people`s material, sometimes there are posts that are so good that they should be shared with everyone. Such is the case with Ynot3`s latest post on iii. I hope he will not mind my reproducing it here:

Much to ponder again in Aton's latest report "Russian/caspian Oil & Gas" published 10 May, 2006.

If anyone still has any doubts about the value of Dragon Oil, I suggest they look at the detail in the graph on page 17 of the Report. It might seem tedious to some, but close examination shows that, in terms of the ratio of profitability/ reserve value, Dragon is in a league of its own. (DGO's point is located is located the top left hand corner of the graph).

The graph plots the profitability before tax per barrel (EBITDA/production) in $/bbl against the Value of Reserves (EV/reserves) in $/bbl. I understand EV, the Enterprise value, to be market capitalisation - cash in hand, ie. actual investment value of the oil in the ground.

Clearly, DGO stands out from the other Russian/Caspian Oil & Gas companies.
Dragon's Profitability (EBITDA/Production) = $40/bbl
Dragon's Reserves value (EV/Reserves) = $5/bbl
This means that for every barrel of Dragon oil, which the market currently values at $5, Dragon received $40 profit before tax in 2005. Dragon gets 8 times as much profit before tax for each barrel of oil than what market thinks each barrel is worth. Dragon's profitability/reserve value ratio is 8. (note: this ratio is my own way of expressing comparative value of companies).


Why does a profitability/reserve ratio of 8 put Dragon in a league of its own.? Because it is at least twice as great as the remaining Russian/caspian Oil & Gas companies on the graph. The next highest is CEO and TATN which have a ratio of about 4. LKOH (Lukoil?) has a modest profitability/reserve ratio of about 2.5.

Can we doubt that there is considerable potential still to be realised by Dragon Oil when its profitability/reserve value ratio is at least twice that of its rivals. Caspian counterpart Burren has a ratio only about 1/4 that of DGO at about 2 (=34/17), suggesting it has probably reached an optimum in its development, and its reserve assets are fully valued. Dragon has one of the highest high profit margins, whilst simultaneously a very low market value is placed on its reserves.

The market has failed to recognise the full value of Dragon's reserves, given its high profitability. Furthermore it has failed to recognise that in the short term Dragon's reserves could quickly be upgraded significantly as a result of two possibilities already in hand :-
1) 3D seismic study has yet to be incorporated in the reservoir appraisal. With complicated fields (like the Cheleken block), more 3D detail tends to lead to positive changes in reservoir estimates.
2) Enhanced recovery using water injection can increase the recovery ratio used for estimating Dragons reserves to an industry average 30%-35%, significantly raising the recoverable reserves at the Cheleken block to 1 bn bbls gross (470 mn bbl net).

Any one of these developments in reserves could propel Dragon's profitability/reserve value ratio into double figures. Add to this the monetising of DGO's 3.5 tcf of gas, and the news this week of potential involvement in a 27 tcf gas field at Yashler, and the ratio could go into orbit.

Even without any of these developments Dragon Oil is still a little gem. Its current assets are not fully valued, and are due for a re-rating by the market to bring its profitability/reserve value ratio in line with the rest of the industry. MM manipulation can't last forever. Market forces have a way of asserting true worth eventually.

Regards
Ynot3

I cant see why DGO has been hammered so badly compared to other oil co.s.
Any ideas anyone.

Yeah the share is currently very overbought

Either overbought or oversold. Forced selling happenned yesterday, I think...
Just under 160M profit, little bedt if any, increasing production etc. You value it!

If the media were not so unkind, it could be around 5 IMO

5 lol.....

About 160M profit last year. Higher oil price and higher production should help to push market cap higher than 770M