[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.]
- 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