Drilling Update

18 July 2012

DRAGON OIL PLC

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

Drilling Update

·; Dzheitune (Lam) 28/174 well tested at initial rate of 1,705 bopd

·; Dzheitune (Lam) 13/144C sidetrack tested at 956 bopd

Dragon Oil plc (Ticker: DGO), an international oil and gas exploration, development and production company, publishes the results of successful completion and initial testing for the Dzheitune (Lam) 28/174 development well and sidetrack of the Dzheitune (Lam) 13/144C.

The Dzheitune (Lam) 28/174 well was completed as a single producer to a depth of 1,976 metres. The well tested for initial production at 1,705 barrels of oil per day ("bopd"). The drilling rig will undergo scheduled maintenance before skidding to spud the next well on the Dzheitune (Lam) 28 platform.

The sidetrack of the Dzheitune (Lam) 13/144C well yielded the initial flow rate of 956 bopd from a single string. The reached depth was 2,637 metres. The rig has moved to add intervals on the Dzheitune (Lam) 13/171 well; while testing and optimisation work continue on this well.

Dragon Oil is to publish its trading statement for the first half of the year on 24 July 2012.

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Martin Jackson

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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-producing fields, Dzheitune (Lam) and Dzhygalybeg (Zhdanov).

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.