Dragon Oil Says Development Work at LAM On Track

Dragon reports that two jackups are operating simultaneously for the first time and that continued success in its workover program, using wireline operations, has resulted in an increase in production and efficiencies in the use of one of Dragon's rigs.

The Astra, which was contracted for an initial period of 6 months from Lukoil Shelf with effect from the beginning of September 2006, has arrived on the Cheleken Contract Area, offshore Turkmenistan.

The Astra has been jacked-up alongside the LAM 13 platform, and has spudded a new development well, LAM13/116. The well will target oil reservoirs in zones 4 through 7 and has a target depth of 3,519 meters. After completion of well LAM13/116, the 'Astra' will be moved to spud an exploration/appraisal well on the LAM West structure from the LAM 28 platform.

Well LAM10/115, which has recently been completed within budget by the Iran Khazar, is currently in the perforation and testing phase, and an update will be given on the test results shortly. This phase of the operation is being conducted using wireline operations, to enable the Iran Khazar to move to the next well location.

The Iran Khazar has now been jacked-up alongside the LAM 21 platform, and has spudded a new development well, LAM21/117. The well will target oil reservoirs in zones 4 through 9, and has a target depth of 4,410 meters.

The workovers using wireline operations have continued with the successful workover of wells LAM63/85 and LAM63/64, which together have generated an incremental increase in production of around 900 bopd.

Hussain M. Sultan, Chairman and CEO of Dragon commented:

'Our production is continuously improving and I am particularly pleased both with the results of the workovers using wireline operations and with the fact that, for the first time in the history of Dragon Oil, we are drilling with two jackups at the same time. We are on the right track to achieve substantially improved production by the end of the year.'

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