Dragon Secures Platform Rig for Cheleken Work

Dragon Oil has signed a two year contract for the Continental Industrial Supply Limited (CIS) CIS-1 platform rig. Securing the services of a drilling rig anywhere in the current climate is a challenge and securing drilling rigs in the Caspian Sea is particularly demanding. Our ability to deploy additional rigs and to tie them in to longer term contracts will enable us to plan our field development commitments over an extended period, said Hussain M. Sultan, Chairman of Dragon Oil.

This rig contract also enables Dragon to accelerate the field development program further and to meet our field development goals. It is our stated goal to fully explore, appraise and develop the Cheleken Contract Area, and the deployment of the CIS Rig is another cornerstone for continued growth.'

Dragon has signed a drilling rig contract with CIS for an initial contract duration of two years. The CIS Rig will be mobilized from its current location in Turkmenistan to Dragon's onshore base in Hazar, Turkmenistan. The CIS Rig will be made ready for offshore operations and it is expected to commence drilling operations during the first half of 2007. It is planned that the CIS Rig will initially drill up to four development wells in the LAM field from the LAM 22 platform.

The LAM 22 platform has been targeted for further development in light of the positive production results achieved both from the earlier development wells drilled by Dragon in 2001 and 2002 and from the recent workover success of well LAM 86/86, which is located in a downdip position to these wells.

Engineering and construction works will commence shortly to prepare for the planned mobilization of the CIS Rig to the LAM 22 platform. These works include an upgrade to the LAM 22 platform and the installation of additional drilling slots.

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