Exploration minnow Dragon Oil turned a profit last year but faces a "critical and immediate" need to arrange new sources of financing, according to chairman and chief executive Mr Hussain Sultan.

Production at its Cheleken operation in Turkmenistan more than doubled to 5,778 barrels per day from 2,435 barrels per day in 2001. This rise in production, along with higher oil prices, helped the company to turn a 2001 loss after tax of $5.4 million (€4.92 million) to a profit of $15.5 million.

Turnover jumped 127 per cent to $50.6 million as four new wells were drilled and completed during the period.

The company has independently estimated reserves of 680 million barrels, down from 711 million a year earlier.

During the year, Dragon borrowed $50 million from its majority shareholder, Emirates National Oil Company (ENOC), to meet other loan repayments as they fell due.

It has since arranged a new loan of $40 million with ENOC.

The balance of $10 million on the original loan will fall due next month.

"Therefore, the sourcing of alternative financing remains a critical and immediate priority for Dragon," Mr Sultan said.