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Dragon Oil - Actively seeking acquisitions

April 2010

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

  • Epic Code:
  • DGO
  • Price:
  • 478p
While Dragon's final results were as expected its presentation unveiled some attractive new opportunities to drive share price growth. Results themselves reflect the lower average oil price last year, which reduced pretax profit from US$369m to US$259m, with eps down from 72 cents to 50.3 cents. But going forward, the picture is significantly brighter. First, Dragon has upped guidance for average production growth for this year to 15%, implying an increase from nearly 45,000 to over 51,500 bopd. But this is just the start, given that over the 2010-2012 period Dragon will  drill up to 40 development wells (including 5 appraisal wells) with total capex of US$600m-US$700m earmarked.Second, it is now starting higher risk b ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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