“We’re looking very diligently to West Africa. We’re looking at offshore and onshore, we’re looking for some exploration upside as well,” Chief Executive Abdul Jaleel Al Khalifa said.

“We’re working harder and harder this year than before and we hope that we can achieve something within 2011.”

Khalifa declined to comment on whether the company was currently in talks regarding an acquisition, adding that Dragon Oil would consider buying a company or assets and was also considering targets in the Middle East, Central and South-East Asia.

“There isn’t any cap but you can easily think of half a billion from our balance sheet plus some financial arrangements you can get from outside,” he said, when asked about how much Dragon Oil was planning to spend on a deal.

Dragon Oil’s pretax profit jumped to $514.7 million in 2010, slightly behind a consensus of $517 million based on a Thomson Reuters I/B/E/S poll of five analysts, from $345 million the year before.

The company’s profits benefited from stronger oil prices in 2010 and after its daily rate of production rose 5.5 percent to 47,211 barrels of oil per day.

The company also said it plans to pay a maiden full-year dividend of 14 cents per share reflecting its strong financial position and future cash generation abilities.

There was no progress on the company’s plan to commercialize its gas resources, said Khalifa.

Gas produced by the company in Turkmenistan is currently flared rather than sold and Dragon Oil has been seeking an agreement with the Turkmen government to sell its gas but Khalifa was not optimistic of a deal any time soon.

“It’s not going to be very easy to secure a sales agreement in the near future, it will take us some time,” he said.

Shares in Dragon Oil, which have gained 22 percent in the last three months, were up 2.3 percent to 571.5 pence at 0835 GMT, valuing the company at 2.9 billion pounds ($4.71 billion).