Dragon Temporarily Suspends Operations at LAM 10/110 Well

Dragon reports that testing of well LAM 10/110 has been temporarily suspended due to perforation guns having become stuck in the well during perforation of the third test interval. Well LAM 10/110 is the first development well to be drilled from the LAM 10 platform in the LAM Field, Cheleken Contract Area, located offshore Turkmenistan. The testing in reservoir zones 8 and 9 flowed oil, and indications are that there are substantial hydrocarbons in zones 4, 5 and 6, and after the retrieval of the guns these will be tested.

Specialized equipment is being immediately mobilized to retrieve the guns and re-complete the well. This equipment is expected to arrive in early June.

The Iran Khazar jack-up rig will be skidded to drill the upper 26' and 16' hole sections of the next well LAM 10/111. Upon arrival in the LAM Field of the equipment the rig will be skidded back to well LAM 10/110 to retrieve the guns and to re-complete the well.

Dragon plans to mobilize a second hydraulic workover unit (HWU) to the Cheleken Contract Area. It is planned that both HWU units will work continuously during the remainder of 2005 and 2006. The first HWU will workover wells in the LAM Field and the second HWU will workover wells in the Zhdanov Field. This is the first time that Dragon will conduct workover operations in the Zhdanov Field since the start of the PSA in 2000.

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