Drilling Update

FOR IMMEDIATE RELEASE

7 July 2011

DRAGON OIL PLC

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

Drilling Update

Dzheitune (Lam) B/157 well tested at initial rate of 1,767 bopd

Dragon Oil plc (Ticker: DGO), an international oil and gas exploration and production company, announces the completion and initial testing of the Dzheitune (Lam) B/157 development well. The Dzheitune (Lam) B/157 well was drilled to a depth of 2,900 metres and completed as a single producer by the Iran Khazar rig. The initial test result from the well was 1,767 barrels of oil per day ("bopd"). The Iran Khazar rig has skidded to the next slot and spudded the Dzheitune (Lam) B/159 well. The NIS rig is currently drilling the Dzheitune (Lam) 28/158 well.

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

"We have put into production six wells within the 2011 drilling campaign, having today reported the completion and initial testing of the Dzheitune (Lam) B/157 development well. We are making good progress on the drilling programme and will update the market on the production numbers for the first half of the year on 21 July 2011 in the trading statement."

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About Dragon Oil

Dragon Oil plc is an 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. 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.