Dragon Oil plcs principal production and exploration interests are located in the Cheleken Contract Area in the Caspian Sea, offshore Turkmenistan. The Cheleken Contract Area covers approximately 950 sq.kms and comprises two offshore oil and gas fields, Dzheitun (LAM) & Dzhygalybeg (Zhdanov), in water depths of 10 to 37 metres.

            Red = 25 day moving average.           Green = 200 day moving average.

Many Russian and Chinees companies like the sanction to go on as long as possible so that they can continue to dominate Iran's market and gain out of this conflict. Iran is a big country and a good market for Americans. They will get it eventually, but with peace.
DGO will continue to gain out of this though.

cynic I agree the sp drop seems odd you don't think it might be jewish investors selling because of the Iranian connection?

not at a loss for sure - lol!

Excuse me butting in on this thread, but a couple of points/questions.
Turkmenistan borders Iran? Surely it stands to reason that neighbouring countries to a potential aggressor are going to see their trade suffer?
The rig currently working the Dzheitune (LAM) field is described as ''The Iran Khazar rig is currently drilling the 8 " hole section of the Dzheitune (Lam) A/129 well with completion expected in August 2008". Does this mean it is leased from them? If so, I can see problems. DGO are currently servicing their own platform, but won't be ready 'til late 2008, plus tendering for 4 others. Therefore, availability of rigs may also be a problem.

Just to add to the above, from the Energy Admin Org U.S.A.,
"Many of the prime deposits are located in disputed areas of the Caspian Sea, and without an agreement between Iran, Azerbaijan, and Turkmenistan on maritime borders, these fields will likely remain undeveloped."
Another company which was exploring in the same area was Burren Energy, which was taken over (by ENI or another Co). Might be interesting to see if their sp has suffered, but can't remember which Co it was.

BUR was a much larger enterprise with exploration rights etc all over the place, so not comparing like with like

Your ignorance is appalling cynic, DGO is not a minnow, when the share price was at circa 5.60 this would have very nearly got DGO into the FTSE 100. If it was not that its primary listing is in Dublin it would comfortably be in the FTSE 250. I suggest a small bit of research might be appropriate before you twitter nonsense.

erm hushpuppy, cynic doesnt do research......he makes so called wisecracks and silly comments as well as his sexual perversions.
Also, cynic is an immigrant so maybe thats why he is ignorant and twitters nonsense. he has opinions on everything and on every thread almost every day.....apparently he has a job.....if i was his manager, i'd be checking amount of time he spends on internet cos if i spent as long as that on internet in my job, i'm sure disciplinary action would be taken against me.
thankfully i dont need to work these days.

Scot mate, this is a discussion board, not a place to air your prejudices. I am sure Cynic can defend himself, but you are becoming offensive. If you don't like the investment comments on these boards, go elsewhere.

don't worry Harry ..... the woaded-one is, i suspect, rather too fond of the bottle for he is at his most offensive in the evening ..... nevertheless, i dare say it shows his true colours.

anyway, back to DGO ..... i have just had a look at the chart, and am amazed that the bears have had such a ripping time here over the last few days ...... whether the minor recovery on the back of their 37% increase in production over the last year can be maintained is worth watching, but i suspect not, at least not immediately - the markets may have recovered somewhat, but a reversal or consolidation must be imminent

Excellent update though and the most important thing are the 2 lines that says : all production can be routed through Baku in Azerbaijan if necessary, well that does remove a big headache if there is trouble with Iran further down the line !, so why the ridiculous drop ?.

289p to buy but still dropping slightly. Buys outweigh sells by 2-1, so maybe a bounce imminent?

No bounce evident as graph still shows no support and Iran showing more problems.

Perhaps shareholders are wondering when they might see some dividends.

Sp sailed past the 200 DMA at just over 400p.
Next good support on the chart is anywhere between 150-170p. Below that then........

Can't rely on those Buys and Sells you know HC -):

Oh great! Now you tell me! :o)

No doubt DGO will drop drastically again today...260p target

what price end of 2009?

An old post i believe is worth reading, from the fools board

They operate in Turkmenistan and this IMHO is the biggest risk to the company. The bloke who runs Turkmenistan is quite a strange chap and makes our megalomaniac politicians seem tame. So the question has to be asked why am I stupid enough to put money into a company which operates in such an odd atmosphere. Well the answer is simple, its oil.
The company is expanding its oil production; by about 1 well per month and a couple of workovers on previously existing wells. However this is offset by big declines in drilled wells. This means that the company has to keep drilling in order to produce the same amount of oil it did the year before. Apparently the well production decline rates, that are characteristic of the Cheleken fields, range from 55% initially before stabilising to about 25% per annum. This has not stopped Dragon setting some high target rates, by the end of this year, they expect to produce 20k bopd and with their very lucrative production sharing agreement with the Turkmenistan government they will get the lions share of this. i.e. For the first 10k bopd they get 50% of production and there after 85%.
Looking at these figures and ignoring decline rates this would give Dragon an income of :-
5k bopd for the fist 10k produced and 8.5kbopd for the second 10k bopd giving a total of 13.5kbopd
Assuming this is over the whole year and allowing for 30 days down time a year this would mean a total production of 13500 * 330 = 4455000 barrels a year.
Assuming oil price of $35 a barrel (average achieved in 2003 was approx $27 a barrel), this would give a turnover of 4455000*35 = $155m

Unfortunately that is not the whole story they have to get the oil out of Turkmenistan to somewhere that will buy it, to do this they have two routes open to them and they tend to use both depending on the cheapest route. The first is through Iran and they use a production sharing agreement where they swap oil instead of pumping it to the other side of the country, however Iran takes a cut. Yes it's expensive to shift oil from Turkmenistan but may get cheaper as new routes compete for the production from the Caspian. The other was through Neka. In 2003 they shipped 1.6M barrels through each.
Well the results for last year are encouraging to say the least. However due to the decline in oil production for the first of this year with no real active drilling I would assume the first of the year will not be as good as the last of 2003. However they have started to drill again with some good results even though they did not complete the first well due to tech problems, but are now drilling new well every 35 days or so, but combined with this they have re worked some old wells and are now increasing production once again. Over the past month and a half they have increased production just due to reworked wells by 3600bopd, so assuming they are still producing over 10kpobd then about 3000 will be attributable to Dragon.


Year ended Year ended
31 December 2003 31 December 2002
US$'000 US$'000
Turnover 82,025 50,593
Thinking myself of reinvesting,having sold up sometime ago. just a matter of waiting for it to settle a little?
cyrill