Dubai/Turkmen-Owned, Dublin-Registered Dragon Oil Seeks Chelekan Field BuyBack

[The great mystery about how Turkmenistan's Caspian Sea oil and gas assets were taken away in an American court from the original post-Soviet contractor, Argentina oil company Bridas, by Unocal of California, before being resold to an Irish oil speculator, Dr. Oliver C. Waldron, head of Dragon Oil, based in Dublin.  After years of token gas and oil production (Turkmen oil could only reach the market by tanker truck, or small tankers on the Caspian (who had to rely upon the narrow Russian-built Volga-Don Canal, to exit the Caspian) Dr. Waldron took-on UAE investors, who later ended-up with the lion's share of the contract.  With prospects rising for some kind of trans-Caspian pipeline being built in the near future, and the real possibility that TAPI might be built, Dragon Oil now feels secure enough to begin buying back shares, which had been sold in leaner times.

And so it continues, the ongoing drama over Turkmenistan's oil and gas riches.] 

Dragon Oil announces share buyback programme

•  US$200 million on-market share buyback programme to purchase up to a maximum of 5% of the issued share capital of the Company.

Dragon Oil plc (Ticker: DGO), an international oil and gas exploration, development and production company, is pleased to announce a US$200 million on-market share buyback programme to purchase up to a maximum of 5% of the issued share capital of the Company (the “share buyback programme”). The programme will commence today.

The Board of Directors of Dragon Oil has recommended the share buyback programme in recognition of the Group’s strong financial position and significant cash generating abilities. The Board believes that a share buyback programme offers an efficient route to return surplus cash resources to shareholders and will not impact upon the Group’s ability to grow production organically to reach its stated production targets and to pursue its diversification strategy by acquiring new assets outside of Turkmenistan.

Dragon Oil generates significant free cash flow, which is supported by solid production growth, high oil prices and a strong record of cost management. The latest reported cash balance as of 31 March 2012 was approximately US$1,652 million, excluding the funds set aside for abandonment and decommissioning activities.We remain committed to our diversification strategy and actively pursue opportunities in the regions of interest to us.

Mr Mohammed Al Ghurair, Chairman, commented:

“Dragon Oil is an established oil and gas producer in Turkmenistan and is well positioned to pursue opportunities to grow outside its home base. We, the Board, are confident that the Group’s financial position and its cash generating abilities allow the Company to finance organic development of the Cheleken Contract Area, add new assets to its portfolio, pay regular dividends and return surplus funds to shareholders through a share buyback programme. Accordingly, the Board believes that the buyback of shares is in the best interests of the Company and its shareholders.”

Dr Abdul Jaleel Al Khalifa, Chief Executive Officer, said:

“I am pleased with the recommendation from the Board to commence a substantial share buyback programme. With a solid track record of delivering organic growth in production and reserves from our key asset, we are well positioned to pursue our diversification strategy and to return value to our shareholders. We have commenced paying regular dividends and have now added a share buyback programme. Diversification remains at the top of our agenda as we seek to deploy our expertise and resources to become a multi-asset company.”

Share buyback programme mechanics

The buyback programme will be executed pursuant to certain pre-set parameters and in accordance with the authorisation granted to the Directors by special resolution No. 9 passed at the annual general meeting of the Company held on 18 April 2012, applicable laws and the Listing Rules including the market price of the shares being subject to a maximum of 5% above the average of the official closing prices of the shares derived from the Irish Stock Exchange daily Official List or, at the option of the Directors, from the London Stock Exchange Daily Official List for the five days before each purchase.

Under the programme, Davy and Nomura International plc (“Nomura”) have been irrevocably authorised at their discretion to effect the purchases on the Irish and London Stock Exchanges in accordance with the above-mentioned authorisation and relevant Irish and UK law and regulation. The trading decisions of Davy and Nomura will be made independently of and uninfluenced by the Company and may exceed 25% (but will not exceed 50%) of the average daily trading volumes of the Company’s shares over the 20 trading days preceding that date. The share buyback programme will commence today, 6 June 2012 and will run until the requisite number of shares has been acquired or, in any event, no later than 31 December 2012.

This announcement is made in compliance with Irish Listing Rules 9.2.1 and 9.4.4 and UK Listing Rules 12.2.1 and 12.4.4. Dragon Oil plc confirms that it currently has no unpublished price sensitive information.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser. More

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Opulent facades mask repression in isolated Turkmenistan

by Benoit Finck

ASHGABAT, June 6, 2012 (AFP) – New shiny marble palaces are being built in Turkmenistan’s capital Ashgabat and gilded statues glitter in the sunlight on its squeaky-clean thoroughfares.

But Facebook is on an official “black list” and surveillance cameras on street lampposts make sure the authorities know if someone breaches the rules — like lighting up a cigarette in the street which is banned.

Thanks to the Central Asian country’s immense reserves of natural gas, President Gurbanguly Berdymukhamedov can afford grandiose constructions in his showpiece capital.

But he still essentially rules one of the world’s most secretive nations in the style of his predecessor, eccentric dictator Saparmurat Niyazov, with citizens living under government control and political parties banned.

When president-for-life Niyazov — called Turkmenbashi or the Father of all Turkmen — died unexpectedly in 2006, then health minister Berdymukhamedov inherited the seat of power, promising liberal reforms in the republic which declared independence from the Soviet Union in 1991.

But instead, he replaced Niyazov’s cult of personality with his own.

Re-elected in February with a score worthy of the planet’s most autocratic regimes (97.14 percent), Berdymukhamedov has so far allowed no opposition party in the country.

Any criticism of his government is considered an attempt to destabilise the state — a crime punishable by 25 years in jail. The regime’s opponents are either in prison or in forced exile abroad.

All media outlets are controlled by the state and there is no access to international press.

‘Inaccessible for technical reasons’

The Internet is also under tight surveillance, with the sites of Human Rights Watch and Amnesty International — two NGOs that denounce Turkmenistan’s appalling human rights record — blocked by the government.

In one of Ashgabat’s rare Internet cafes, a manager told an AFP correspondent visiting for an international conference that “these sites are inaccessible in Turkmenistan for technical reasons.”

Observers say social networks are blocked by the authorities, but there is a trick that allows Internet-savvy users to access them via a Russian website.

With the atmosphere of fear in the country, locals are reluctant to speak with foreigners. The few who dare to talk say they are happy with life in Turkmenistan.

“We are well here, it is quiet here,” said a golden-teethed female vendor in Ashgabat market, where taking photos is forbidden.

Mohammed, a 44-year-old taxi driver, echoed her sentiment, saying that gas and water are free of charge for people, and electricity and heating are extremely cheap due to government subsidy.

“We have what we need to eat and there is no war here, what else do you want,” he said when asked about restrictions on freedoms in his country.

Foreign journalists — who are allowed into the country on rare occasions like this month’s international refugee conference — are closely watched by authorities who discourage them from working if not accompanied by an official.

Authorities make sure they do not see much outside luxurious central Ashgabat and the stark contrast between its golden-domed palaces, marble government buildings, five-star hotels and the poverty in rural provinces.

In a country where the state dominates all spheres of social life, leaving no room for civil society, the kaleidoscope of restrictions exposes the ruling regime’s bizarre nature.

When night falls in Ashgabat, lights illuminate its palaces and fountains, but streets are deserted and quiet.

Restaurants and cafes close up by 11:00 pm, car horns are forbidden as well as loud music, and entertainment opportunities are limited — even if Berdymukhamedov lifted his predecessor’s ban on opera, theatre and cinema.