Dragon Oil Hires Astra for Work Offshore Turkmenistan

Dragon has signed a contract with Lukoil Shelf Limited for provision of the Astra jackup for use in the Cheleken Contract Area offshore Turkmenistan.

The Astra is expected to commence drilling operations for Dragon in the Cheleken Contract Area from early September 2006 and the initial contract duration will be six months.

Dragon plans for the Astra to drill one development well in the LAM field and one exploration well (which may have an optional sidetrack) in a near-field prospect known as LAM West. This near-field prospect of LAM West has been identified from data acquired and processed from the recent Marine 3D Seismic Survey carried out over the entire Cheleken Contract Area.

Engineering works are in progress to support the planned well activities for the additional Astra rig. These engineering works include the installation of additional drilling slots on two existing platforms and the future installation of topside facilities and sub-sea pipelines.

Hussain M. Sultan, Chairman of Dragon commented:

'I am very pleased that we have secured the Astra from Lukoil Shelf Limited. Our field development plan, utilizing the services of a second drilling rig, will enable Dragon to fully explore, appraise and develop the Cheleken Contract Area. We view the signing of the contract for the Astra, albeit for six months, as an important milestone in our continued growth.

The identification of the near-field prospect of LAM West from the results of the Marine 3D Seismic Survey shows us just how important the Marine 3D Seismic Survey was to our planned filed development.'

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