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.

"OUCH"

RNS Number : 9299N
Dragon Oil PLC
26 February 2009

?
26 February 2009
DRAGON OIL plc
("Dragon Oil" or the "Company")


Investigation within the Marketing and Contracts Departments


On the advice of the executive management team and following a scheduled
internal audit review, the Board of Dragon Oil has commenced an investigation
into certain possible irregularities identified in its procurement procedures.
These irregularities involve possible improper conduct between certain former
senior managers in the Company's Marketing and Contracts Departments. The
Internal Audit Department and KPMG (Dubai) have been engaged to assist in this
in-depth assessment.


The Board is investigating these irregularities and is undertaking a thorough
review of all Company procurement procedures. The Board is taking appropriate
legal advice on all matters associated with the investigation. The relevant
authorities have been informed or are in the process of being informed of the
investigation.


Final results of the investigation and any resulting actions may ultimately take
some time to complete. However, the Board expects to be in a position to update
shareholders on progress being made in the investigation before the end of
March.


The announcement of Preliminary Results for the year ended 31 December 2008 was
due to be published on 4 March 2009. However, as a result of the identification
of these alleged irregularities, the Board has decided to delay the publication
of these results until it has had the opportunity to consider the initial
results of the investigation and is in a position to determine the impact, if
any, the investigation will have on the Company's financial position.


Dr. Abdul Jaleel Al Khalifa, Chief Executive Officer, commented:


"This matter is completely unacceptable. Having identified the possibility of
these irregularities, the Board is moving swiftly to investigate the possible
irregularities and will take actions to ensure that purchasing procedures are
operating properly and that appropriate actions are taken.


An initial review suggests that the matter will not have a material impact on
the financial position of the Company. Dragon Oil remains committed to executing
its strategy of developing its oil and gas production activities and field
infrastructure and to diversifying its asset portfolio."


For further information please contact:


Investor and Analyst enquiries
Dragon Oil Plc (+971 4 305 3600)
Dr. Abdul-Jaleel Al-Khalifa, Chief Executive Officer
Leanne Denman, Investor Relations Officer


CYRIL

Well the last paragraph seems to steady my nerves?

cyril

Looks like DGO is following the footsteps of Sibir Energy and Equator Petroleum.

Sp crashed this am.

A lot of buys at this level, could see 140p at close?
cyril

Back to 140p, usual overreaction to pick up some cheap stock. always feel sorry for those stopped out as i've had it happen to me (once) and its not nice.
cyril

Margin call triggered me out at 125, lost 2k.

I would think DGO will go to 100p within the next few days. Today at close, may hit 120p.

hlyeo98; a wind up merchant " ignore".

cyril

So, the profit could be even higher.
Considering to buy again

sp unlikely to improve as long as uncertainty exists with their internal accounting problems, delaying publication of their annual results may indicate a longer term problem that has remained undetected.

Ambrian analyst Werner Riding says: "We think that this news will cause short-term weakness in the share price, and advise investors to BUY into this weakness due to its lack of fundamental basis."

"HAVING SPOKEN WITH THE COMPANY we understand that this investigation OUGHT NOT to have any material impact on the financial and operational performance of the business," Riding adds

Placed in capitals to highlight some points.

Don't forget 45,000bopd @$40 on top of the $640m cash in house.
cyril

cyril delaying the publication of their annual accounts may be considered prudent while their auditors investigate, but in the meantime it would be prudent for investors to stand back until the result of the auditors invesigations are made public.

Anyway, 80% of the market cap is cash and making money everyday.
The value of the asset is probably more than the market cap adding with huge potential, I think there is no reason to be worried.
I wish I had money to buy back more.

delaying results is never ever good news (delayed for how long?), but if the scare is pretty much unwarranted, then as Halifax told me yesterday (comparing with TLW), this looks a pretty good bet

Read http://www.rigzone.com/NEWS/article.asp?a_id=71892

Year end cash and cash equivalents, together with term deposits, was US $867 million

.....
Highlights

Growing Production

* Achieved a 28% increase in 2008 gross production with an average daily rate of 40,992 barrels of oil per day ('bopd') compared to 31,997 bopd in 2007
Related Pictures

Lam Field Turkmenistan- Chekelen Block
(Click to Enlarge)
* Exit production of 45,600 bopd at the end of 2008 (2007: 40,048 bopd)
* Completed nine development wells during 2008 compared to seven in 2007
* CIS 1 rig now being mobilised to Dzheitune (Lam) Platform 28
* Iran Khazar rig currently undergoing scheduled maintenance to be completed by March 2009
* Dragon Oil's own refurbished Rig 40 spud its first well on January 11, 2009

Strengthening Infrastructure

* Construction of 30 inch, 40 km oil and gas trunkline project underway
* Phase 2 expansion of Central Processing Facility (CPF) to handle 100,000 barrels of total liquid per day and up to 220 mmscfd of gas per day under construction
* Completed phase 2 upgrade of export facility in 2008 increasing loading capability

Stable Financial Position

* Year end cash and cash equivalents, together with term deposits, was US $867 million (2007: US $543 million)
* Capital expenditure for the year was US $307 million (2007: US $228 million)
* Fair value charge in 2008 from derivative financial instruments was US $21 million (2007: US $15 million)

.....

Struggling to pass 140p at the moment.

of course the difficulty with Turkmenistan is that it is singularly xenophobic and would much rather keep all its mineral wealth profit in its own coffers - which i suspect answers the question with regard to DGO's low rating

sp down awaiting delayed results and accounting investigation.

quite so, but my comment is still valid

Dragon Oil crystal clear purchase (Emerging Markets Investor)
Endingen (aktiencheck.de AG) - According to the experts of "Emerging Markets Investor" is the Dragon Oil shares (ISIN IE0000590798 / WKN 877789) a glass of clear purchase.
The company is a profitable oil and gas producers, especially in Turkmenistan active. Here you enjoy most political support. With USD 870 million cash, the company well positioned for further expansion plans, without further corporate action to be able to operate. Last year, the Group's daily 40,000 barrels of oil encouraged. By 2012, the daily production increased to 100,000 barrels. Because of the huge reserves and resources of 1.2 billion barrels, the company is also an attractive takeover target. The stock was last of 577 GBp GBp fallen to 147.

According to the experts of "Emerging Markets Investor" is the Dragon Oil shares at the current price level is a crystal-clear purchase. (Issue 05 of 09.03.2009) (10.03.2009/ac/a/a)
Analysis Date: 10.03.2009

It would appear that a purchase of over 55,000 @2.08euro's was made after
time(a rise of 39%)(strange?), will be interesting to see what the SP opens at tomorrow?
cyril