Drilling Update

7 September 2010

DRAGON OIL PLC

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

Drilling Update

Completion and Initial Testing of Development Well Dzheitune (Lam) 28/147

Dragon Oil plc (Ticker: DGO), an international oil and gas exploration and production company, announces the completion and initial testing of the Dzheitune (Lam) 28/147 development well. The well, which is the second in a series of wells to be drilled from the Dzheitune (Lam) 28 platform, was drilled to a depth of 3,400 metres on a single completion basis by the NIS rig. The well was tested on a 24/64" choke and flowed at an initial rate of 2,451 bopd with a well head flowing pressure of 1450 psi.

The NIS rig has since skidded to the next slot on the Dzheitune (Lam) 28 platform and has spudded the Dzheitune (Lam) 28/149 well.

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

"I am delighted to report the successful completion and initial testing of the Dzheitune (Lam) 28/147 development well, in addition to the spudding of the Dzheitune (Lam) 28/149 well. This brings the Company to a total of seven 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)

Anna Gavrilova, Investor Relations

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.