Dragon Oil to reduce capital expenditure this year

LONDON, Jan 20 (Reuters) - Turkmenistan-focused oil explorer Dragon Oil (LSE: DGO.L - news) plans capital expenditure of up to 26 percent less this year compared with 2014, but said it was on track to reach output of 100,000 barrels per day by the end of this year.

Dragon Oil, which last month dropped a $800 million takeover bid for rival Petroceltic due to weak oil prices, said in a trading update on Tuesday it expected capex of between $500 million and $600 million, compared with $677 million last year.

The energy group, which reports full-year results on Feb. 17, plans to hike average gross production by 10 percent this year and hit 100,000 barrels per day at the end of the year. It then plans to maintain this level for five years from 2016.

Additional output from new wells in Turkmenistan helped Dragon Oil achieve a 2014 exit rate of 92,008 barrels per day, higher than its target of 87,000 to 90,000 given towards the end of last year.

Oil companies across the globe are grappling with a near 60 percent drop in oil prices over the past seven months.

Dragon (SES: E2:MT1.SI - news) said on Tuesday it was delaying appraisal drilling at its Tunisian Hammamet West field until 2016.

(Reporting by Karolin Schaps; Editing by David Holmes)