Dragon Oil (LON:DGO) this morning said its investment in new pipeline and processing facilities had alleviated production bottlenecks.
The net result has been an impressive lift in output to an average 52,575 barrels of oil a day in December from 47,463 a year earlier. The 2010 exit rate was 57,013.
It has been a quite frenetic year for Dragon, which operates in the Cheleken Contract Area in the eastern section of the Caspian Sea, as the company spent a total of US$454 million on infrastructure and drilling 11 new wells.
Year-end reserves have been upgraded to 639 million barrels of oil, up 22 million barrels compared with a year ago, and 1.6 trillion cubic feet of gas.
However the firm’s gas resource base has been reduced to 1.4 trillion cubic feet from 3.1 trillion.
At the year-end Dragon held cash and cash equivalents totaling US$1.34 billion, including US$174 million in abandonment and decommissioning funds.
Chief executive Abdul Jaleel Al Khalifa said: "2010 was a very active year for Dragon Oil with major pipeline and processing facilities completed, 11 wells put into production and contracts for a Super M2 jack-up rig and two new platforms awarded - just to mention a few of the projects completed and awarded during the year.
“Over the past year, we have undertaken a number of concrete steps to secure production growth in the years ahead and we will continue to invest in infrastructure and secure drilling rigs on favourable commercial terms.
“Dragon Oil has delivered solid results despite last year's production growth falling short of our expectations due to infrastructure bottlenecks.
“This situation has now been resolved with the introduction of the new facilities, resulting in the year-end exit rate of 57,013 bopd, which is almost 10,000 bopd higher than the average daily production rate for 2010."