Baragatan Exploration Well Update

7 July 2014

DRAGON OIL PLC

(the "Company" or together with its subsidiaries "Dragon Oil" or the "Group")

Baragatan Exploration Well Update

Dragon Oil plc (Ticker: DGO), an international oil and gas exploration, development and production company, advises that Nido Petroleum Philippines Limited (ASX: NDO) ("Nido"), Dragon Oil's partner in Service Contract 63 (SC 63) NW Palawan Basin, offshore the Philippines (Dragon Oil 40% interest), today issued the following operational update.

BARAGATAN-1A UPDATE

Nido Petroleum Limited (ASX: NDO) ("Nido" or the "Company") on behalf of SC 63 Joint Venture partners PNOC-EC and Dragon Oil (Philippines SC 63) Limited wishes to advise that the Baragatan-1A well on the 6 July 2014 had reached a depth of 2,681 meters Measured Depth (2,328 meters TVD sub-sea) having drilled through the primary Pagasa Formation reservoir objective.

The primary Pagasa Formation reservoir objective was encountered between 2,534 - 2,654 meters Measured Depth (2,209 - 2,305 meters TVD sub-sea) comprising primarily of limestones of poor to good reservoir quality with minor sandstones and siltstones. Preliminary Logging Whilst Drilling (LWD) log data recorded through this interval indicates the reservoir units to contain low gas saturations (C1 to C5) which did not warrant further evaluation or testing.

With respect to the two zones of potential interest encountered in the shallower Pagasa Formation (as advised in the Company's ASX release of the 23 June 2014), preliminary evaluation of available LWD data indicates the thin sandstones encountered within the gross interval 1,977 - 2,004 meters Measured Depth (1,785 - 1,805 meters TVD sub-sea) are potentially gas-bearing and the limestone encountered over the gross interval 2,207 - 2,236 meters Measured Depth (1,960 - 1,982 meters TVD sub-sea) contains low gas saturations. Both these intervals did not warrant further evaluation or testing.

The forward operation is to Plug and Abandon the Baragatan-1A well.

Dr Abdul Jaleel Al Khalifa, CEO, Dragon Oil plc, commented:

"The exploration drilling in the Philippines did not discover commercial hydrocarbons. While with this well we fulfilled our work obligation, we aim to integrate the information provided by the Barragatan-1A well into the regional geological picture and assess our future interest in the block."

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About Dragon Oil

Dragon Oil plc is an international oil and gas exploration, development and production company, quoted on the London and Irish Stock exchanges (Ticker symbol: DGO). Its principal producing asset is in the Cheleken Contract Area, in the eastern section of the Caspian Sea, offshore Turkmenistan.

Dragon Oil (Turkmenistan) Ltd., a wholly owned subsidiary of Dragon Oil plc, holds 100% interest in, and is the operator of, the Production Sharing Agreement for the Cheleken Contract Area. The operational focus is on the re-development of two oil and gas producing fields, Dzheitune (Lam) and Dzhygalybeg (Zhdanov).

The Group has exploration blocks in Tunisia, Iraq, Afghanistan, Egypt and the Philippines. Dragon Oil's diversification strategy is to add exploration and production assets within Africa, parts of Asia and the Middle East in order to create a diversified and balanced portfolio of assets for the Group.

www.dragonoil.com

Disclaimer

This news release may contain forward-looking statements concerning the financial condition and results of operations of Dragon Oil. Forward-looking statements are statements of future expectations that are based on management's current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. No assurances can be given as to future results, levels of activity and achievements and actual results, levels of activity and achievements may differ materially from those expressed or implied by any forward-looking statements contained in this report. Dragon Oil does not undertake any obligation to update publicly or revise any forward-looking statement as a result of new information, future events or other information.