Drilling Update

20 July 2010

DRAGON OIL PLC

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

Drilling Update

Highlights

·; Development well Dzheitune (Lam) 13/144 tested at an initial rate of 1,809 barrels of oil per day ("bopd")

·; Development well Dzheitune (Lam) 28/146 tested at an initial rate of 2,311 bopd

·; Sidetrack of Dzheitune (Lam) A/129 yielding incremental production of 1,140 bopd

Dragon Oil plc (Ticker: DGO), an international oil and gas exploration and production company, announces the completion and initial testing of both the Dzheitune (Lam) 13/144 and 28/146 development wells together with the sidetrack of the Dzheitune (Lam) A/129 well.

Dzheitune (Lam) 13/144which was drilled to a depth of 3,434metres on a single completion basis by Rig 40,tested at an initial rate of 1,809 bopd. Rig 40 will now be cold-stacked on the Dzheitune (Lam) 13 platform and may be used for some additional workovers in future years.

Dzheitune (Lam) 28/146 which was drilled to a depth of 3,200metres on a single completion basis by the NIS rig, tested at an initial rate of 2,311 bopd. This represents the first in a series of development wells to be drilled by the NIS rig from the Dzheitune (Lam) 28 platform. The NIS rig has now skidded to the next slot on the Dzheitune (Lam) 28 platform and has spudded the Dzheitune (Lam) 28/147 well.

The Iran Khazar rig has completed a sidetrack of the Dzheitune (Lam) A/129 well which was drilled to a depth of 1,815 metres on a single completion basis and has yielded incremental production of 1,140 bopd. This completes the planned workover programme for 2010. The Iran Khazar rig has since moved to the Dzheitune (Lam) B platform where it is planned to spud the Dzheitune (Lam) B/148 well, after first undergoing routine maintenance.

Dr Abdul Jaleel Al Khalifa, Chief Executive Officer, commented:

"I am delighted to report the successful completion and initial testing of both the Dzheitune (Lam) 13/144 and 28/146 development wells together with the sidetrack of the Dzheitune (Lam) A/129 well. This brings us to a total of six new development wells to date this year and we remain on target to complete 11 new wells in 2010."

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For further information please contact:

Media enquiries:

Citigate Dewe Rogerson (+44 20 7638 9571)

Martin Jackson

George Cazenove

Investor and analyst enquiries:

Dragon Oil plc (+ 44 20 7647 7804)

Sally Marshak, Investor Relations

About Dragon Oil

Dragon Oil Plc is an innovative international oil and gas 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 in the Caspian Sea, offshore Turkmenistan. Operational focus is on the re-development of two oil producing fields, Dzheitune (Lam) and Dzhygalybeg (Zhdanov).

www.dragonoil.com

Note

This statement 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.