DGO.L Regulatory News (DGO)

FOR IMMEDIATE RELEASE

21 September 2011

DRAGON OIL PLC

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

Drilling Update

Dzheitune (Lam) B/159 well tested at initial rate of 2,223 barrels of oil per day

Dragon Oil plc (Ticker: DGO), an international oil and gas development and production company, announces the completion and initial testing of the Dzheitune (Lam) B/159 development well. The well was drilled to a depth of 2,900 metres and completed as a single producer by the Iran Khazar rig. The initial test result from the well was 2,223 barrels of oil per day. 

Having completed a total of eight wells on the Dzheitune (Lam) B platform, Dragon Oil has mobilised the Iran Khazar to the Dzheitune (Lam) A platform. A number of additional jack-up rig slots have recently been added on the Dzheitune (Lam) A platform allowing us to avail of this opportunity and schedule the Iran Khazar rig for the drilling and completion of the Dzheitune (Lam) A/162 development well before the rig is due to perform a workover of the Dzheitune (Lam) A/127 well.

The NIS rig and Rig 40 are currently drilling the Dzheitune (Lam) 28/161 and 13/160 wells, respectively, which we expect to put into production over the coming few weeks.

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

"I am pleased to report that Dragon Oil has successfully completed and conducted initial testing of the Dzheitune (Lam) B/159 well. We anticipate being able to complete five more wells before the year-end given the recent addition of jack-up slots on the Dzheitune (Lam) A platform and availability of the Iran Khazar rig. That will give us a total of 13 new development wells within the 2011 drilling programme, out of which eight have already been completed."

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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.