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Authoritative Independent Monthly Share Selections Using Technical & Fundamental Analysis

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Dragon Oil - New marketing agreement

July 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:
  • 423p
The shares rallied after Dragon announced that it had signed a new marketing agreement to sell its oil through Baku, Azerbaijan at a price equivalent to a discount to Brent of US$6-US$8 per barrel. This deal is less attractive than Dragon's previous marketing agreement with the National Iranian Oil Company (NICO), which had expired and was not renewed. With Dragon being notably reticent as to the reasons for its failure to renew with NICO, we are left guessing as to the explanation, but top of the list must be complications arising from the latest round of US sanctions against Iran.However, this slight disappointment should be placed into context, given Dragon's improving production and reserves profile, its gas marketing opportun ...

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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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