Dragon Falls Most in a Year on Larger Oil Discount: London Mover
The shares slid as much as 6.2 percent, the steepest intraday decline since May 2012, and were 4.4 percent lower at 621.50 pence as of 10:55 a.m. Today’s drop pared its gain for the year to 12 percent.
Dragon sold its oil for an average of $86 a barrel at about 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.”
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