17th Jul 2006 12:14
Dragon Oil PLC17 July 2006 PRESS RELEASE Dragon Oil Plc ('Dragon' or the 'Company') DRILLING UPDATE WELL LAM 10/114 STARTS PRODUCTION Dragon announces that well LAM 10/114, drilled from the refurbished LAM 10platform in the Cheleken Contract Area offshore Turkmenistan, has been completedand is on production. The well tested at a combined rate of 1,700 barrels of oilper day, ('bopd') from reservoir Zones 3, 4, 5 and 6. The well was drilled to a depth of 4,700 metres to develop shallow hydrocarbonsin Zones 3 to 9, and to evaluate the potential of deep reservoir Zones 11 and12. LAM 10/114 encountered hydrocarbons in Zones 3, 4, 5, 6, 7 and 9. However,commercial quantities of hydrocarbons were not encountered in Zones 11 and 12. A dual completion was installed in the well. Reservoir Zones 3 and 4 wereproduced through the upper completion string and tested at a rate of 1,458 bopd.Reservoir Zones 5 and 6 were produced through the lower completion string andtested at a rate of 242 bopd. The rate for the lower completion is less thanexpected based on evaluation of the logs, and accordingly it is planned tore-perforate these zones at the earliest opportunity, to increase production.Zones 7 and 9 were not tested for technical reasons and these Zones will beaccessed at a later date. The Iran Khazar jack-up rig has been skidded to drill well LAM 10/115 from therefurbished LAM 10 platform. The well has a target depth between 3,700 and 4,300meters. The Astra jack-up rig, which has been contracted from Lukoil Shelf, is onschedule to commence drilling in September 2006 from the LAM 13 platform.Hussain M. Sultan, Chairman of Dragon Oil commented: "I am pleased to advise that the Company has completed well LAM 10/114, despitesome technical difficulties encountered in the lower zones, and to havecommenced drilling of well LAM 10/115. Production from the Cheleken ContractArea is currently over 22,000 bopd and we hope to achieve a significantimprovement in production by the end of the year as per our development plan. Weare committed to making the necessary investment in order to grow productioneven further. This includes the upgrade and replacement of existinginfrastructure, installation of new infrastructure and acceleration of thedrilling programme." Ends Enquiries:Citigate Dewe Rogerson +44 207 638 9571Media enquiries: Martin Jackson / George CazenoveAnalyst enquiries: Nina Soon Date: 17 July 2006 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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