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BigD
Contributing Member
Joined: 07-Oct-04
Posts: 10
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| Posted: 31-Aug-05 at 09:03 | IP Logged
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This was tipped here a good eight months ago and after some research I bought in. I have been more than happy with the increase and thank the original poster. However, as a bit of a safety net I put a stop loss on it at 127p. Lo and behold, it dipped quickly to that figure around a week ago and I sold. Now, it's up to 170p something and I'm itching to buy back in, even at that price! Everything's right with this company other than the dodgy area that they work in. Does anyone have any thoughts? Should I stay or should I go somewhere else? I've also got some Tullow Oil and Carin Energy. I might put the money there instead? Or is Oil played out (I personally don't think so with prices still tipped to rise) and I should look somewhere else?
Thanks in advance.
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Sliboy
Bronze Contributor
Joined: 20-Dec-02
Location: United Kingdom
Posts: 134
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| Posted: 01-Sep-05 at 12:22 | IP Logged
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Not sure if I can help, think I was the original poster, I still hold but have top sliced a few at 180p The is still a string of good news to come, however I guess it depends on if you think oil stocks in general will stay high and go higher. I personally think they will but they will have a bit of a fall back at some pointin the future I would expect.
sorry not to be much help
Craig
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cybertrader
Platinum Contributor
Joined: 18-Dec-04
Location: United Kingdom
Posts: 586
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| Posted: 13-Mar-06 at 11:50 | IP Logged
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Press release from Dragon Oil, At least these guys are actually hitting the black stuff!
Summary:-
Well LAM 10/113 drilled in the Cheleken Contract Area, offshore Turkmenistan, has tested oil from Zones 3, 4, 5 and 6 at a combined rate of 3,453 barrels of oil per day, ('bopd').
Full release here
http://www.investegate.co.uk/Article.aspx?id=200603131017416 797Z
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Sliboy
Bronze Contributor
Joined: 20-Dec-02
Location: United Kingdom
Posts: 134
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| Posted: 04-Apr-07 at 10:33 | IP Logged
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Dragon Oil two years on.
I have been meaning to do an update on one of my biggest holding for nearly two years now. WOW time really does fly.
I still hold a lot of DGO but top sliced 10% of my holding at just above £2.10 from memory. Now it is Easter break, I have decided to do my long awaited write up of this investment and to see if it still worth holding. Then I am off skiing.
Two years ago I wrote this.
http://boards.fool.co.uk/Message.asp?mid=8714953&sort=whole# 8997553
Since then the company has done quite well and has increased its profit and turnover year on year, like all oil companies it has benefited greatly from an increase in oil price.
It still operates in the same old place Turkmenistan. One day I am sure the country will develop its real-estate operations and try and sell apartments to unsuspecting British investors, promising huge returns when the budget airlines start flying there and they are due to become part of the EU. Recently the country had a major upset when the President for life died and a new president took over. This could be either significantly good or bad for any investors in this country and where most of the risk lies. But then again, investors in the British oil business could say the same with Gordon making up new and exciting ways of taxing companies. However the news coming out of Turkmenistan seems to be pro business and pro oil companies. http://www.turkmenistan.gov.tm/ekonom/ek&oil_eng.htm
Looking at the numbers
Diluted shares 512M at £1.80 gives a market cap of £ 921M
They have P2 of 301m barrels (approx $6 a barrel) but should increase this year as exploration wells are being drilled on new structures.
All loans paid off in full and net cash of $296 208 000 or £156M at the beginning of January.
Gross production
Average gross production of 20,514 bopd during the year, 6% higher than in 2005 (2005: 19,426 bopd), of which 15,115 bopd (2005: 14,008 bopd)was attributable to Dragon.
Earnings per share 35.37c or 18.61p (at $61 a barrel)
This puts the company on a historic PE of about 10
The problem next is to work out the increase in production for 2007. 2006 does not seem to of been a great year in terms of production increase, this is partly due to a blockage in a pipe in the first ¼ of last year that stopped approx 5000 bopd thus lowering the overall average. They also need to continually drill to keep the bopd the same as the decline rates of new wells is significant in the first year of production.
Now here is the guess work. At year end we know from the results DGO where producing 27,353 bopd. Significantly higher than the average of last year, this is not surprising as the blockage in the early part of he year would of made a material difference to the average. Also they may be getting a better rate for there oil since the new processing facility is now in operation. (I would see no point in them building this if this is not the case but as yet this is an unknown quantity).
My model of forward production, I know its not perfect but seems approximately work.
<pre>
Actual 2006Model 2006 2007 2008 2009 & nbsp;
bopd 20514 &nb sp; 20514 29000 ; 35000 40000; 100000
Oilto DGO15115 15196 ; 21481 25926 & nbsp; 29630 74 074
oil $ 61 &nb sp;61 61 ; 61 61 & nbsp; 61
Revenue 320M & nbsp; 333M 471M ; 569M 650M&nb sp; 1626M
Costs 40M &nbs p; 40M 57M &nbs p; 69M 79M &nbs p; 198M
Depletion 61M 61M 86M 104M ; 119M 299M
Admin 6M ; 6M 6M & nbsp; 6M 6M &nb sp; 6M
Tax 43M 43M 61M ; 74M 85M & nbsp; 213M
Profit$ 180M & nbsp; 181M 259M ; 314M 360M&nb sp; 909M
eps $ 0.3537 ; 0.3546 0.5064 ; 0.6138 0.703 2 1.7767
Share Price £ 1.8 &n bsp;1.8 1.8 &n bsp; 1.8 1.8
PE &nbs p; 9.64 &n bsp;6.75 5.57 4.86 1.92
Share Price £ ; £2.40 & nbsp;£2.91 £3.33 &nb sp; £8.42
</pre>
At the current price and with expected increase in production there seems to be a lot of scope for capital gain. Between 2007 and 2009 the company is expected to spend $500M on infrastructure and start the build of increased processing facility to process 100000 bopd by 2010 thus my calculation for 100 000 bopd is inserted for fun.
There could be a big bonus of the sale of gas, which could boost earnings significantly, but my calculations do not include this.
The company says that it wants to have production of 40kbopd by 2008 and increase production by 25% each year. They have or will have three drill rigs on site this year and have two at present as well as working over old wells. They seem to be securing the infrastructure to increase production significantly so my estimates are not unreasonable.
The company has made noises about diversification, which would be welcome, but it might mean swapping assets with another company or new areas to explore/ drill. This adds extra risk but with the experience and quality of management with their ability to keep tight control on costs this might add some value. Appraisal wells are due to be drilled and may add to the 2p reserves. The company looks like it has stepped up a gear in 2007 and still lots to play for. All in my IMHO.
Edited by Sliboy on 04-Apr-07 at 11:29
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Sliboy
Bronze Contributor
Joined: 20-Dec-02
Location: United Kingdom
Posts: 134
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| Posted: 23-Aug-07 at 14:44 | IP Logged
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Looking interesting agian. New presedent looking for investment. Area hotting up. 3 drilling rigs by year end 33kobd per day approx.
24kobd to dgo.
Could enter ftse 250 this year with market cap £1b+
Estimated turnover $500M+
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Sliboy
Bronze Contributor
Joined: 20-Dec-02
Location: United Kingdom
Posts: 134
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| Posted: 03-Oct-07 at 18:06 | IP Logged
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Make that 40kobd approx. And 2P upgrade in 2008 + another 50kobd being added to processing facility to make 100kobd but this will take time to build.
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Sliboy
Bronze Contributor
Joined: 20-Dec-02
Location: United Kingdom
Posts: 134
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| Posted: 25-Oct-07 at 22:59 | IP Logged
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Anyone interested in my next update? any interest in this share when the price is amost £3 ??
Edited by Sliboy on 25-Oct-07 at 23:00
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Happy Moose
Contributing Member
Joined: 03-Jul-06
Posts: 26
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| Posted: 26-Oct-07 at 17:45 | IP Logged
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Sliboy wrote:
| Anyone interested in my next update? any interest in this share when the price is amost £3 ?? |
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Yep me! I've had shares in this for about 10 years. They've just about recovered to the value of when I bought them. I forgot about them for years and just noticed in the past year I may actually get my money back!
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Fillyaboots Forums : General Trading
Topic: Dragon Oil
