Dragon Oil Hits New Gross Peak Production Record

Dragon Oil has hit a new gross peak production record of 40,038 bopd, and Dzheitune (Lam) A/123 is now on production yielding an initial combined flow rate of 3,284 bopd.

The Iran Khazar jack-up drilling rig has moved to spud a further development well, Dzheitune (Lam) A/125, and Dzheitune (Lam) 22/124 has reached TD and is currently being completed by the CIS-1 platform-based drilling rig.

"I am very pleased to report that we have delivered on our promise to achieve a production rate of 40,000 bopd by 2008," said Chairman and CEO Hussain Sultan. "A new record production of 40,038 barrels of oil was achieved on 31st December 2007 concluding Dragon's year on a high note and enabling us to look forward to 2008 with optimism for continued progress.

"This success is due to the completion of the initial testing of the Dzheitune (Lam) A/123 development well drilled from our Dzheitune (Lam) A production platform. The flow rate from this well is consistent with the results from the previous three wells drilled in this area.

"I am also pleased to announce that we were honored with a very positive meeting with the President of Turkmenistan on 26th December 2007. His Excellency, the President expressed his support for Dragon Oil's strategy to increase oil production as well as our plans for the utilization of the considerable gas resources contained in the Cheleken Contract Area."

Dragon Oil has completed its seventh well during 2007, Dzheitune (Lam) A/123, which has been drilled from the Dzheitune (Lam) A platform using the 'Iran Khazar' rig. The well yielded an initial flow rate of 3,284 bopd from the short and long strings. Testing of the individual short and long strings resulted in initial production rates of 1,750 bopd and 1,534 bopd respectively.

The Iran Khazar rig has since skidded to slot 3 on the Dzheitune (Lam) A platform and has spudded a further development well, Dzheitune (Lam) A/125 with a target depth of 4,390 meters.

The CIS-1 rig is currently completing the development well, Dzheitune (Lam) 22 /124, on the Dzheitune (Lam) 22 platform. Upon completion of this well, the CIS-1 rig will drill three additional development wells from this platform before moving to the Dzheitune (Lam) 28 platform.

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