Dragon Oil Says LAM Field Development On Track

Dragon is pleased to announce that progress on the new build Lam A wellhead and production platform and the new processing facility is continuing as planned. The platform forms part of Dragon's development of the LAM Field in the Cheleken Block, offshore Turkmenistan. The processing facility is being located onshore of the Cheleken Block and is expected to have the capacity to process up to 50,000 barrels oil per day (bopd), together with associated gas and water from the offshore LAM Field. Both the platform and the processing facility are planned to be commissioned in 2006.

Dragon has signed a contract with an initial two year term with the National Drilling Company of Iran for the Iran Khazar jack-up rig. The rig is expected to be mobilized to the Cheleken Block in March 2005 to drill from the LAM 10 platform.

Production from the LAM Field continues to be maintained above 20,000 bopd, together with approximately 48 million standard cubic feet of gas per day. Following a concept design study for gas utilization conducted last year, Dragon plans to proceed with a review of the development and marketing alternatives.

Dragon has completed its 2004 workover of seven wells achieving total incremental production of 6,979 bopd, following choke optimization. The workover of the last well in the program, LAM 86/86, has been temporarily suspended due to technical problems and may be re-entered in the future. The workover program will continue in 2005.

Hussain M. Sultan, Chairman of Dragon Oil, commented:

'I am very pleased that production is currently being maintained above the 20,000 bopd level. The new build LAM A platform, new processing facility and jack-up rig contract underscore Dragon's commitment to develop the LAM Field and further increase production levels. The Company will also focus on gas development and marketing alternatives this year'.