Dragon Oil Completes Testing at LAM 21/109

Dragon has successfully completed its fourth development well to be drilled on the refurbished LAM 21 platform in the Cheleken Contract Area, offshore Turkmenistan, well LAM 21/109. Well LAM 21/109 tested at a total rate of 5330 barrels of oil per day ('bopd') from Zones 4 and 9. Encouraging oil shows were encountered in reservoir Zone 4 through to Zone 11.

Well LAM 21/109 was drilled to the Total Depth of 4,670m and this is the first time that oil bearing zones have been drilled by Dragon in Zones 10 and 11 in the LAM Field.

The well was spudded on July 19, 2004 as part of Dragon's continuous drilling program in the Cheleken Contract Area.

WELL LAM 21/106

The jackup rig will be skidded to well LAM 21/106, which was temporarily suspended on November 18, 2003 due to technical reasons. Well LAM 21/106 will be sidetracked to target the upper reservoir Zones 3 and 4 where encouraging signs of oil and/or gas bearing sands were logged.

Hussain M. Sultan, Chairman of Dragon Oil commented:

'Well 21/109 is the fourth and deepest well to be drilled from the refurbished LAM 21 platform and we are very pleased that this well has achieved this level of production. We look forward to further production enhancement from the sidetrack of well LAM 21/106 and the workover program, and to achieve our production target by the end of the year.'