Dragon Oil Making Progress in Turkmenistan

Dragon Oil continues its field development operations in the Cheleken Contract Area and is making good progress in drilling, facilities installation and production operations. Lam 22/102 (the second well in the development program) is already at a depth of 3,440 meters, heading towards the proposed total depth of the well is 4,050 meters. This is deeper than the Lam 22/101 well, with the objective of testing some of the deeper reservoir intervals. Completion of the Lam 22/102 well is expected during early November following which the rig will be skidded to the next slot for the drilling of Lam 22/103.

The 10-inch pipeline from the Lam 22 platform to the Block 2 manifold platform has been installed on the sea-bed and is in the process of being hooked up. Commissioning of the line is expected in November, to coincide with the completion of Lam 22/102. Commissioning of the 10 inch pipeline will also enable the first well, Lam 22/101, to be produced unconstrained by the current 4 inch line. The well continues to produce in excess of 2,000 barrels per day from the Lower Red Series Reservoir and given the high flowing pressure of the well, increased flow rates are expected when it is produced through the 10' line.

Transportation of Dragon's oil has been continuing uninterrupted, through its established swap arrangement with Iran. Dragon's Chief Executive Ian Baron stated "I am very pleased with the progress made in recent months and as we expected, the drilling time for the second well has been much improved."