July 16 (Bloomberg) -- Dragon Oil Plc, an explorer focused on Turkmenistan, declined the most in nine months in London trading after saying it expects to sell oil at a bigger discount to Brent.
The shares slid 5.4 percent, their steepest drop since Oct. 17, to 615 pence. Today’s retreat pared their gain for the year to 11 percent.
Dragon sold its oil for an average of $86 a barrel at a 20 percent discount to Brent in the first half, according to a statement today. It sees the discount ranging from 16 percent to 21 percent to the European crude benchmark, up from a February forecast of 14 percent to 17 percent, since the “pricing period is not aligned with the reporting period.”
Dragon also said today the delivery of the platform-based Land Rig 3 is being delayed “on the contractor’s side” and drilling is now expected to start in the middle of 2014.
“Realizations and rig delays disappoint,” Tom Robinson, a London-based analyst at Nomura International Plc, wrote in an e-mailed report. “Further delays to infrastructure and drilling rigs highlight the logistical pressures of Caspian Sea operations.”
Dragon was also cut to hold from accumulate by Tudor Pickering Holt & Co.
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