DGO.L Regulatory News (DGO)

DRAGON OIL PLC

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

Share Buyback Programme

Dragon Oil plc (Ticker: DGO), an international oil and gas exploration, development and production company, is pleased to announce a US$200 million on-market share buyback programme to purchase up to a maximum of 5% of the issued share capital of the Company (the "share buyback programme"). The programme will commence today.

The Board of Directors of Dragon Oil has recommended the share buyback programme in recognition of the Group's strong financial position and significant cash generating abilities. The Board believes that a share buyback programme offers an efficient route to return surplus cash resources to shareholders and will not impact upon the Group's ability to grow production organically to reach its stated production targets and to pursue its diversification strategy by acquiring new assets outside of Turkmenistan.

Dragon Oil generates significant free cash flow, which is supported by solid production growth, high oil prices and a strong record of cost management. The latest reported cash balance as of 31 March 2012 was approximately US$1,652 million, excluding the funds set aside for abandonment and decommissioning activities.We remain committed to our diversification strategy and actively pursue opportunities in the regions of interest to us.

Mr Mohammed Al Ghurair, Chairman, commented:

"Dragon Oil is an established oil and gas producer in Turkmenistan and is well positioned to pursue opportunities to grow outside its home base. We, the Board, are confident that the Group's financial position and its cash generating abilities allow the Company to finance organic development of the Cheleken Contract Area, add new assets to its portfolio, pay regular dividends and return surplus funds to shareholders through a share buyback programme. Accordingly, the Board believes that the buyback of shares is in the best interests of the Company and its shareholders."

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

"I am pleased with the recommendation from the Board to commence a substantial share buyback programme. With a solid track record of delivering organic growth in production and reserves from our key asset, we are well positioned to pursue our diversification strategy and to return value to our shareholders. We have commenced paying regular dividends and have now added a share buyback programme. Diversification remains at the top of our agenda as we seek to deploy our expertise and resources to become a multi-asset company."

Share buyback programme mechanics

The buyback programme will be executed pursuant to certain pre-set parameters and in accordance with the authorisation granted to the Directors by special resolution No. 9 passed at the annual general meeting of the Company held on 18 April 2012, applicable laws and the Listing Rules including the market price of the shares being subject to a maximum of 5% above the average of the official closing prices of the shares derived from the Irish Stock Exchange daily Official List or, at the option of the Directors, from the London Stock Exchange Daily Official List for the five days before each purchase.

Under the programme, Davy and Nomura International plc ("Nomura") have been irrevocably authorised at their discretion to effect the purchases on the Irish and London Stock Exchanges in accordance with the above-mentioned authorisation and relevant Irish and UK law and regulation. The trading decisions of Davy and Nomura will be made independently of and uninfluenced by the Company and may exceed 25% (but will not exceed 50%) of the average daily trading volumes of the Company's shares over the 20 trading days preceding that date. The share buyback programme will commence today, 6 June 2012 and will run until the requisite number of shares has been acquired or, in any event, no later than 31 December 2012.

This announcement is made in compliance with Irish Listing Rules 9.2.1 and 9.4.4 and UK Listing Rules 12.2.1 and 12.4.4. Dragon Oil plc confirms that it currently has no unpublished price sensitive information.

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For further information please contact:

Investor and analyst enquiries

Dragon Oil plc (+44 (0)20 7647 7804)

Anna Gavrilova

Media enquiries

Citigate Dewe Rogerson (+44 (0)20 7638 9571)

Martin Jackson

Kate Lehane

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.