Analyst Caren Crowley, from broker Davy, expects Dragon Oil (LON:DGO) to release a good operational update later this month.
She thinks when it releases a trading statement on July 21 for the six months to 30 June, the firm will be "comfortably on track" to reach or exceed its own guided target of up to 20 percent production growth in 2011.
The analyst believes this morning's well result from the Cheleken contract area offshore Turkmenistan is an incremental positive for the stock.
Today, the Caspian Sea focused company said it had completed and tested its latest development well - Dzheitune (Lam) B/157 - and it gave initial flow test results of 1,767 barrels of oil per day.
"The initial flow rate is reasonable and is in-line with the average initial production rates from the previous six wells drilled from platform LAM B. The well was drilled to a depth of 2,900metres, 1,000 metres short of the typical depth of previous wells completed from this platform."
This well, she added, took around six weeks to complete rather than the average 12-week turnaround time seen in the past.
Dragon is currently expanding its operations in the Cheleken contract area offshore Turkmenistan, with a major three year drill programme that is expected to cost as much as US$700 million.
The Iran Khazar rig has now skidded to the next slot and spudded the Dzheitune (Lam) B/159 well. The NIS rig is currently drilling the Dzheitune (Lam) 28/158 well.
Chief executive Dr Abdul Jaleel Al Khalifa told investors today: "We have put into production six wells within the 2011 drilling campaign, having today reported the completion and initial testing of the Dzheitune (Lam) B/157 development well.
"We are making good progress on the drilling programme and will update the market on the production numbers for the first half of the year on 21 July 2011 in the trading statement."
Dragon Oil plc is an international oil and gas development and production company. Its principal producing asset is in the Cheleken contract area, in the eastern section of the Caspian Sea, offshore Turkmenistan.
The operational focus is on the re-development of two oil-producing fields, Dzheitune (Lam) and Dzhygalybeg (Zhdanov).
Broker Davy rates the stock "outperform" and it's NAV (net asset value) for Dragon's oil and cash reserves alone is 603 pence per share.
This valuation assumes that the Brent benchmark averages $100 per barrel in 2011 and $85 per barrel from 2012 onwards.