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Wed 10 Aug 2011 08:20 PM

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Dubai's Dragon Oil says time is right for acquisitions

Caspian Sea oil explorer also says first-half earnings more than doubled to $309.4m

Dubai's Dragon Oil says time is right for acquisitions
oil, energy, GCC oil, GCC energy, Middle East energy, Middle East oil

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.

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