Dragon Oil Says Development Work on Track

Hussain Sultan, Chairman & CEO of Dragon Oil said: 'Our strategy, which I outlined to investors in our update in March this year, is progressing as planned and we have made good progress on all fronts during the first few months of the year.

We expect to consolidate and improve production levels over the remainder of the year. Rig deployment, production optimization and progress on infrastructure development are critical to our plans for the remainder of the year and we are optimistic that we can achieve the ambitious targets we have set for ourselves.'

  • Average Q1 2007 production of 26,943 barrels of oil per day ('bopd'), a 56% increase over the average production for Q1 2006.
  • Two jackup rigs deployed throughout the quarter.
  • Two development wells completed, with a further development well and an appraisal well on the LAM West structure nearing completion offshore Turkmenistan.
  • Mobilization of the platform-based rigs continues on track, with the CIS-1 rig expected to be mobilized in Q2 2007 and Dragon Oil's own Rig 40 expected to be deployed in the second half of the year.
  • Infrastructure development program also on track, with the 50,000 bopd processing facility now fully functional. New in-field sub-sea pipelines scheduled for completion in Q2 2007 and the first phase of Dragon Oil's export jetty upgrade is almost complete.
  • Hedges using collars were executed for the period up to December 31, 2007 covering 3.7 million barrels of oil on a zero cost basis.