Dragon Oil to Plug & Abandon First LAM 21 Well

Dragon reports that its first well 21/106 drilled on the LAM 21 platform in the Cheleken Block offshore Turkmenistan has been plugged and temporarily suspended due to technical reasons. Well 21/106 was spudded on November 18, 2003 and is the first of up to four wells to be drilled from the LAM 21 platform. Due to these technical reasons the well was sidetracked twice before being drilled to a total depth of 3,197 meters. Notwithstanding, oil and/or gas bearing sands were logged in the upper reservoir zones 3, 4 and 5.

Dragon will continue with its drilling program on the LAM 21 platform and expects to spud well 21/107 at the end of February. It is intended to drill this well to a minimum total depth of 3,540 m, with an option to extend to 4,200 meters.

Following the results of future drilling from the LAM 21 platform and because of encouraging reservoir potential in well 21/106, Dragon will re-evaluate options to complete well 21/106 later this year.

Chairman Hussain M. Sultan commented: 'While we have encountered some difficulties in drilling our first well from the LAM 21 platform, we have gained much useful information and data that will assist us with future wells. I am confident that we can achieve production growth for 2004 as a result of our continuous drilling program'.