Dragon Oil Begins Production from LAM 10/110

Dragon reports that well LAM 10/110 on the refurbished LAM 10 platform in the Cheleken Contract Area, offshore Turkmenistan has tested oil from Zones 4, 5, 8 and 9 at a combined rate of 1603 barrels of oil per day. The previously reported technical difficulties were successfully resolved and the well is now on production.

The deep reservoir zones 11 and 12, drilled and tested for the first time by Dragon Oil flowed water at the LAM 10/110 location. However, significant potential exists in these zones and they will be further evaluated at an updip location as part of the ongoing field development.

The Iran Khazar jackup rig is currently being skidded to drill the second well from the refurbished LAM 10 platform, well LAM 10/111. This well is planned to have a total depth of around 3600 meters.

Hussain M. Sultan, Chairman of Dragon Oil commented:

'We are pleased that LAM 10/110 is now producing oil and generating revenue. We now look forward to a successful outcome from LAM 10/111, the next well in our continuous drilling program, and from our ongoing workover program.'