DGO.L Regulatory News (DGO)

FOR IMMEDIATE RELEASE

30 December 2010

DRAGON OIL PLC

(the "Company" or together with its subsidiaries "Dragon Oil" or the "Group")

Drilling and Infrastructure Update

Completion and Initial Testing of the Dzheitune (Lam) 28/151 well

·; Dzheitune (Lam) 28/151 well tested at an initial combined rate of 2,656 bopd

·; 14-inch in-field pipeline from the Dzheitune (Lam) B platform to the Dzheitune (Lam) 28 platform completed and commissioned

Dragon Oil plc (Ticker: DGO), an international oil and gas exploration and production company, announces the completion and initial testing of the Dzheitune (Lam) 28/151 development well and successful commissioning of the 14-inch in-field pipeline.

The Dzheitune (Lam) 28/151 was drilled to a depth of 3,512 metres by the NIS rig and completed with dual strings. The testing of the short and long strings resulted in production rates of 1,745 barrels of oil per day ("bopd") and 911 bopd,respectively. The NIS rig will skid to the next slot and spud the Dzheitune (Lam) 28/152 well in the next few days.

The Iran Khazar is currently completing the Dzheitune (Lam) B/150 well with initial testing expected to take place within the next week.

The 14-inch in-field pipeline from the Dzheitune (Lam) B platform to the Dzheitune (Lam) 28 platform has been successfully completed and commissioned.

Dr Abdul Jaleel Al Khalifa, Chief Executive Officer, commented:

"I am delighted to report the successful completion and initial testing of the Dzheitune (Lam) 28/151 development well. We anticipate the completion and testing of the Dzheitune (Lam) B/150 well shortly.

"We are pleased to have successfully commissioned the 14-inch in-field pipeline from the Dzheitune (Lam) B platform to the Dzheitune (Lam) 28 platform, increasing the throughput capacity in the Western area of the field. This significant upgrade to the infrastructure will eliminate network bottlenecks, as the newly added 14-, 18-, 20-inch in-field pipelines and the 30-inch trunkline are capable of accommodating planned increases in future production."

- end -

For further information please contact:

Media enquiries

Citigate Dewe Rogerson

Martin Jackson

George Cazenove

+44 (0)20 7638 9571

Investor and analyst enquiries

Dragon Oil plc

Anna Gavrilova / Sally Marshak

+44 (0)20 7647 7804

About Dragon Oil

Dragon Oil plc is an international oil and gas development and production company, quoted on the London and Irish Stock exchanges (Ticker symbol: DGO). Its principal producing asset is in the Cheleken Contract Area, in the eastern section of the Caspian Sea, offshore Turkmenistan.

Dragon Oil (Turkmenistan) Ltd., a wholly owned subsidiary of Dragon Oil plc, holds 100% interest in and is the operator of the Production Sharing Agreement for the Cheleken Contract Area. The operational focus is on the re-development of two oil-producing fields, Dzheitune (Lam) and Dzhygalybeg (Zhdanov).

www.dragonoil.com  

Disclaimer

This news release may contain forward-looking statements concerning the financial condition and results of operations of Dragon Oil. Forward-looking statements are statements of future expectations that are based on management's current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. No assurances can be given as to future results, levels of activity and achievements and actual results, levels of activity and achievements may differ materially from those expressed or implied by any forward-looking statements contained in this report. Dragon Oil does not undertake any obligation to update publicly or revise any forward-looking statement as a result of new information, future events or other information.