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.

Awaiting news of their accounting problems is no news good news sp seems to think so?

very difficult to know ...... dubai gov't money may influence any potential untoward comment

at last ......

Dragon Oil plc (Ticker: DGO) will announce its Preliminary Results for the period ended 31 December 2008 on Friday, 27 March 2009.

Grom that RNS,

On 26 February 2009, Dragon Oil announced that the Group's Internal Audit
Department had identified the irregularities. As a result of these findings,
Dragon Oil appointed KPMG to undertake an investigation into improper conduct by
certain former senior managers. The Board sought immediate advice from its
lawyers and sponsors and has acted, and will continue to act, upon the
information available to ensure that the matter is dealt with swiftly and that
procurement policies and procedures continue to operate effectively.

Following a review of KPMG's findings, Dragon Oil can confirm that these
irregularities will have no material impact on the Group's financial position.


Truely amazing that a few with their hands in the till, could have caused the
SP to drop to 106p.
cyril

Agreed cyril.

http://www.oilbarrel.com/news/display_news/article/ahead-of-fridays-results-announcement-dragon-oil-provides-some-reassurance-following-investigation/771.html

March 25, 2009

Ahead Of Fridays Results Announcement, Dragon Oil Provides Some Reassurance Following Investigation Into Procurement Irregularities





After last months shock announcement that it was investigating possible fraud in its marketing and contracts departments, Dragon Oil threw its investors some comfort on Tuesday when it announced that the matter would have no material impact on its financial position. This is welcome news as the current climate would be severely unforgiving for any company facing an unexpected hole in its finances: the Middle East-backed company has a strong balance sheet with US$867 million in cash at the end of 2008 and production of more than 40,000 barrels per day. Investors will, however, be keen for more detail on the scale of the problem and further reassurance that this is now a closed matter with the focus once more on growth from the companys key project in Turkmenistan.
The investigation was launched in late February when the Dubai-headquartered company engaged auditing giant KPMG to assist in an in-depth assessment of possible irregularities in its procurement procedures. The company, which is listed on the London and Irish Stock Exchanges, said it was investigating improper conduct between former senior managers in the suspect departments and, given these alleged irregularities, delayed the publication of its full year results. Those results, which were due out on March 4, will now be released on Friday.

Preliminary findings from the investigation indicate that improper conduct was confined to the Marketing Department and the Contracts Department. Although internal controls were in place, the individuals involved managed to override the various controls in the procurement process through collusion, the company said in a statement. These individuals appear to have obtained financial benefits for themselves by securing improper payments from certain contractors. The managers involved have been removed and the contractors have been contacted by Dragon Oil.

Investors will be relieved by three things. First, the swift action taken by the company, with CEO Dr. Abdul Jaleel Al Khalifa last month decrying the matter as completely unacceptable. Second, the fact that the initial investigation has confirmed there is no material impact on the companys financial position. Finally, that the investigation has not thrown up further areas of impropriety, which, the company will be hoping, should give investors some comfort that this is a well-run and clean ship.

All of this, of course, is an unwelcome distraction for a company that has otherwise been making solid progress on its Cheleken PSA in the Turkmen section of the Caspian Sea. This Soviet-era project covers 950 sq km and lies in shallow waters, no more than 50 metres deep. There is plenty of potential here, with proved and probable reserves of 645 million barrels of oil and condensate (Dragons share comes to 283 million barrels and 3.2 trillion cubic feet of gas) lying in two fields, Dzheitune (LAM) and Dzhygalybeg (Zhdanov).

These are impressive numbers but extracting value from these reserves isnt straightforward. The company, backed by Middle East money after the Emirates National Oil Co took a 52 per cent stake, has had to contend with aging Soviet-era infrastructure, the logistical and commercial issues of exporting oil from a geopolitically sensitive area and the technical challenges of a geologically complex structure. This is a complex faulted structure, with multiple sand layers and thin reservoir sands of variable quality and connectivity. This means its important the company identifies and maps faults in order to optimally position wells and keep costs down.

Given these challenges, Dragon has made good headway. Last year the company increased average gross production by 28 per cent to 40,992 barrels per day compared to 31,997 bpd in 2007, with an exit rate of 45,600 bpd (Dragons entitlement barrels are about 58 per cent of the total). These increases come on the back of continuous drilling of the field, a tactic that will continue this year as three rigs work up the field full time which should lead to a 15 per cent uplift in production by year-end.

Earlier this month Dragon let the CIS-1 platform-based rig go as the company decided to bring in a higher spec rig capable of drilling the higher slanted wells that should deliver higher productivity per well. The tender process for such a rig is underway and the new contract should be awarded in Q2 2009. In all, 13 wells are expected to spud in 2009 under a US$600 million capex budget.

The real upside here lies in the Cheleken contract areas vast gas resource. Dragon is making solid progress towards monetizing this resource, building the new trunkline and commissioning the Phase 2 expansion of the central processing facility, which will increase production capacity to 100,000 bpd of liquids with the capability to handle up to 220 million cubic feet per day of gas. Bids were received late last year for the Front End Engineering Design Study, which will then see the company tender for the additional construction works. And given recent events, all this tendering work is likely to be done to the highest procurement standards.

"These individuals appear to have obtained financial benefits for themselves by securing improper payments from certain contractors.

shock, horror! .... who would ever imagine that such things would go on in "bandit land"!? ...... not the sort of thing that would ever happen in US or Europe or Far East or Arabian Gulf ...... silly boys were obviously not sufficiently discreet!!

on a more serious note, i think the numbers and prospects are likely to be very encouraging and am very happy to be holding a fairly modest number

and have just added

Your telling porky's cynic, what you mean is you've shorted it.

you'll get a good thrashing when i get you home!

here's your numbers, which i would have thought to be pretty handsome, though i have no idea what was expected .....

Key Financial Highlights for 2008
2008
2007
Change

(US$ millions, unless stated)
Revenue
706
597
18%

Operating Profit
474
365
30%

Profit for the year
369
304
21%

Basic EPS (US cents)
71.8
59.5
21%

Cash balance
876
549
60%

Debt
0.0
0.0
nil

Growing Production
Gross field production from the Cheleken Contract Area increased by 28% to 15 million barrels of oil
Average daily rate of production reached 40,992 bopd compared to 31,997 bopd in 2007
Exit production of 45,600 bopd achieved at the end of 2008 (2007: 40,048 bopd)
Nine development wells completed during 2008 compared to seven in 2007
The Group's Rig 40 spud its first well in January 2009

Positive Outlook for 2009-11
Complete up to 35 development wells including eight wells to be completed in 2009
Target annual production growth of up to 15% on average in 2009-11
Capital expenditure for infrastructure in 2009-11 estimated at US$700-800 million including US$300 million allocated for 2009 projects
The amount of capital expenditure for drilling is mainly determined by the number of wells drilled which in turn is subject to the availability of rigs in the Caspian Sea region
Accelerate commercialisation of the gas resources
Pursue the diversification of asset base with focus maintained on quality

market clearly likes the figures quite a lot ...... will enthusiasm be sufficient to see 200 dma at 212 breached decisively?

One hell of a producer this one, topped up the other day !, the only cloud on the horizon is the Iranian question......but with the new American administration there must be a lot of talking between governments coming, so perhaps not quite such a threat of any disruption to this company as there was always the worry of an American backlash with the Bush era !.

relative to iraq, iran is a haven of peace ..... am quite happy to trade there (iran), always provided the contract and payment is made from outside the country!

Moving to London is strategic..

Do i detect a possible golden cross?
cyril

Do i detect a possible golden cross?
cyril

dodgey digit again cyril

golden cross? .... well i guess we're coming up to easter, so quite possibly

Well I'm out for now gl everone.