DGO.L Regulatory News (DGO)

FOR IMMEDIATE RELEASE

19 January 2012

DRAGON OIL PLC

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

Drilling Update

Dzheitune (Lam) 13/163 well tested at 1,584 barrels of oil per day with added perforations

Dragon Oil plc (Ticker: DGO), an international oil and gas exploration, development and production company, announces the successful testing of the Dzheitune (Lam) 13/163 development well. The Dzheitune (Lam) 13/163 well was completed with a single string to a depth of 2,703 metres by Rig 40 in December 2011 and tested at 296 barrels of oil per day. Additional data and analysis led to re-completing the well in different reservoir intervals; this resulted in an improved production rate of 1,584 barrels of oil per day. Rig 40 has skidded to the Dzheitune (Lam) 13/144B well to work it over.

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

"I am pleased to report that the flow rate from the Dzheitune (Lam) 13/163 development well has improved significantly after we added perforations at different reservoir intervals. We constantly seek to optimise production from existing as well as new wells using a range of techniques and it is satisfying to see an immediate positive impact on our production."

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About Dragon Oil

Dragon Oil plc is an international oil and gas exploration, 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.