DGO.L Regulatory News (DGO)

FOR IMMEDIATE RELEASE

29 October 2010

DRAGON OIL PLC

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

Drilling Update

Completion and Initial Testing of the Dzheitune (Lam) B/148 and 28/149 wells

·; Dzheitune (Lam) B/148 and 28/149 wells tested at an initial combined rate of 2,639 bopd and 4,379 bopd, respectively.

Dragon Oil plc (Ticker: DGO), an international oil and gas exploration and production company, announces the completion and initial testing of the Dzheitune (Lam) B/148 and 28/149 development wells.

The Dzheitune (Lam) B/148, the third well in a series of wells to be drilled from the Dzheitune (Lam) B platform, was drilled to a depth of 3,858 metres by the Iran Khazar rig and completed with dual strings. Testing of the short and long strings resulted in production rates of 1,556 barrels of oil per day ("bopd") and 1,083 bopd,respectively.  As reported in the Interim Management Statement, the Iran Khazar rig is now drilling the Dzheitune (Lam) B/150 well.

The Dzheitune (Lam) 28/149 well, which was drilled to a depth of 3,295 metres by the NIS rig, was also completed with dual strings. The short string tested at 1,866 bopd with the long string testing at 2,513 bopd. The NIS rig has skidded to the next slot on the Dzheitune (Lam) 28 platform and spudded the 28/151 well.

We expect to put the last two wells into production before the end of the year and as such these wells will contribute to production growth in 2011.

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

"I am pleased to report the successful completion and initial testing of the Dzheitune (Lam) B/148 and 28/149 development wells. The solid results from both wells and the near-completion of the trunkline should provide a firm foundation for driving production growth. The last two wells of the 11 wells planned for 2010 are being drilled now and we expect to complete them before the end of the year."

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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.