Dragon Oil Expands Operations Offshore Yemen

Dragon Oil has agreed to acquire interests in Blocks 35 (10%), 49 (up to 10%) and R2 (10%) in the Republic of Yemen from Virgin Resources Limited.

This is a significant step forward in the company's strategy to achieve greater portfolio diversification. Management firmly believes that Dragon Oil will be able to utilize this valuable new foothold in Yemen as a platform from which to accelerate growth and to expand further within the region.

A drilling program for Blocks 49 and R2 is under way, with up to 6 prospects being drilled as part of the first phase of development.

Yemen has an extensive and stable oil and gas infrastructure, which will enable early low cost production and cost-effective drilling. In addition, the country has proven remaining reserves of over 1 billion barrels of oil with facilities to load super tankers through modern pipelines.

"This farm-in agreement emphasises our continued commitment to securing future growth and value for Dragon Oil’s shareholders," said Chairman & Chief Executive Hussain Sultan. "We look forward to working with Virgin Resources Limited and developing what we see as a first step towards greater diversification and geographic expansion. The management team will continue to actively pursue acquiring new assets which will enhance and further diversify Dragon Oil’s portfolio."