Dragon Continues Workover Program on LAM Block

Dragon reports that its well workover program has continued successfully with the testing of the third well in the program (well LAM63/65). The well tested at 925 barrels of oil per day (bopd) with less than 1% water. Total incremental production from the workover programme since mid June is 2,750 bopd.

In June 2004, Dragon commenced a work-over program for various wells in its LAM Field in the Cheleken Contract Area, offshore Turkmenistan. These old wells were drilled prior to Dragon signing its Production Sharing Agreement and have significant potential for untapped reserves.

The work-over program will now continue on up to five additional wells, three of which will be re-completed using a hydraulic workover unit. The program is expected to be completed during the fourth quarter of this year.

Hussain M. Sultan, Chairman of Dragon Oil commented:

'I am pleased with the performance of our team and the results of the current workover program. Workover of the old wells in our LAM field provides an opportunity to increase production levels at relatively low cost. This was the third well to be worked-over and we will continue to carry out this program to increase our production and complement our continuous drilling program.'