Dubai-based Dragon Oil, a Caspian Sea oil explorer with about $1.5 billion in cash, said the time is right to consider acquisitions given the recent drop in stock markets, according to CEO Abdul Jaleel Al Khalifa.First-half earnings more than doubled to $309.4 million, from $137.6 million last year, Dragon said on Wednesday in a statement.The company reported record $527.4 million revenue in the period and expects to beat its 20 percent production growth forecast this year, he said.“There could be opportunities” to acquire assets, Al Khalifa said in a phone interview. “We are sharpening our pencil. It is time.”
Global equity markets lost more than $7 trillion in a two-week sell-off through on Tuesday on the slowing US economy and the deepening European debt crisis.
Brent oil prices dropped about 11 percent in the period, prompting investors to sell some oil exploration company shares, making fundamental valuations attractive, according to industry analysts, including Evolution Securities Ltd.
Dragon shares rose the most in more than a month, climbing 5.6 percent to close at 454.25 pence in London.Dragon is on the way to reporting its second-best year if oil prices stay around $100 a barrel through 2011, Al Khalifa forecast.“There is a big change in the market,” Al Khalifa said. “If the crude price is maintained at $100 plus, we definitely believe that our revenue and our profit this year will be in the same line as we did at the first half of the year.”At the same time, the company is “comfortable” with lower oil prices, he said.
Al Khalifa expects major shareholders, such as Emirates National Oil Co, to maintain their holding in the company because of past performance and future growth prospects.
“For us there could be protection because some shareholders” will keep investment in the company, he said.
From / Arabian Business News