DGO.L Regulatory News (DGO)

20 September 2012

DRAGON OIL PLC

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

Drilling Update

Dzheitune (Lam) C/175 well tested at initial rate of 1,420 bopd

Dragon Oil plc (Ticker: DGO), an international oil and gas exploration, development and production company, today publishes the results of successful completion and initial testing for the Dzheitune (Lam) C/175 development well and an update on the results and work at the Dzheitune (Lam) 13/171 well.

The Dzheitune (Lam) C/175 well was completed as a single producer to a depth of 2,721 metres. The well tested at an initial production rate of 1,420 barrels of oil per day ("bopd") from the deep layers. This is an excellent result for these layers. The shallow layers, which were also targeted for this well, contained oil bearing sands as predicted by the geological model; however, these zones were between gas and water formations and the decision was made to perforate these sands at a later stage. Hence, the well was completed with a single string. The results of this well will help in optimising locations of future wells in this platform.

The drilling rig has been mobilised to the Dzheitune (Lam) A platform and is now drilling the Dzheitune (Lam) A/176 development well.

The Dzheitune (Lam) 13/171 development well, which was drilled on the Dzheitune (Lam) 13 platform to a depth of 2,893 metres and did not yield commercial oil rates, is being considered for conversion into a water injector-type well in the Dzheitune (Lam) 13 area. This will be the second water injection project besides the pilot Dzheitune (Lam) 75 area. The Dzheitune (Lam) 13 area has been producing for many years and is due for pressure support, which could help enhance the production potential and reserves in this area.

The land rig will be stacked on the platform pending the evaluation of options for its further use. The leased land rig is undergoing maintenance in preparation for spudding the Dzheitune (Lam) 28/177 development well later this month.

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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.