Dragon Oil Encouraged by Cheleken Reserves Offshore Turkmenistan

Dragon Oil has announced the results of the recent certification of its oil and condensate reserves in the Cheleken Contract Area in the Caspian Sea, offshore Turkmenistan. The certification was completed by Gaffney, Cline and Associates.

Abdul Jaleel Al Khalifa, CEO, commented, "I am pleased to announce the results of the latest reserves certification for the Cheleken Contract Area with proved and probable (2P) reserves of 645 million barrels of oil and condensate and 3.2 tcf of gas resources. This certification incorporates the results of full field remapping for all the reservoir levels based on the 3D seismic survey conducted from 2004 to 2005. This result confirms our previous interpretation of the field and we can now continue to proceed confidently with the field development plan."

Reserves Update

Between June 2004 and April 2005 , Dragon acquired a full-block 3D seismic program (652 kms2) across both the Dzheitune (Lam) and Dzhygalybeg (Zhdanov) fields. This data was then processed and made available for interpretation in the fourth quarter of 2005.

A preliminary interpretation of the time-migrated data set was initiated at that time and the resultant maps were used to position the new Dzheitune (Lam) A platform and to identify the potential for hydrocarbons in the Dzheitune (Lam) West structure. Dzheitune (Lam) West was successfully appraised with the well Dzheitune (Lam) 28/120 and Dragon Oil has since drilled eight successful wells from the Dzheitune (Lam) A platform.

Dragon Oil recognized that due to the structural complexity of the fields , the quality of the imaging could be improved with further processing of the seismic data. A full depth migration of the data (Pre-Stack Depth Migration) was conducted , which resulted in a significant improvement in the structural and stratigraphic imaging further improving our understanding of the fields.

This latest reserves update incorporates the results of full field re-mapping, based on this improved dataset.

Following completion of the gas facilities and a gas sales agreement it is expected that Dragon Oil will be able to confirm the proportion of contingent gas resources that can be transferred to reserves.