Employee share scheme purchases

DRAGON OIL PLC

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

Employee share scheme purchases

Dragon Oil announces that the Company today proposes to implement a limited share buyback programme of up to 5,000,000 shares in the Company. The buy-back programme will commence on 26 September 2011 and will run until the requisite number of shares has been acquired or, in any event, no later than 31 January 2012. The sole objective and purpose of the programme will be to meet all relevant obligations arising from the Company's various share schemes.

The buyback programme will be executed pursuant to certain pre-set parameters and in accordance with the authorisation granted to the Directors by Special Resolution No. 9 passed at the annual general meeting of the Company held on 18 May 2011, applicable laws and the Listing Rules including the market price of the shares being subject to a maximum of 5% above the average of the official closing prices of the shares derived from the Irish Stock Exchange daily Official List or, at the option of the Directors, from the London Stock Exchange Daily Official List for the five days before each purchase.

Under the programme, Davy and Nomura International plc ("Nomura") have been irrevocably authorised at their discretion to effect the purchases on the Irish and London Stock Exchanges in accordance with the above-mentioned authorisation and relevant Irish and UK law and regulation. The trading decisions of Davy and Nomura will be made independently of and uninfluenced by the Company and may exceed 25% of the average daily trading volumes of the Company's shares over the 20 trading days preceding that date.

This announcement is made in compliance with Irish Listing Rules 9.2.1 and 9.4.4 and UK Listing Rules 12.2.1 and 12.4.4. Dragon Oil plc confirms that it currently has no unpublished price sensitive information.

- end -

For further information please contact:

Investor and analyst enquiries

Dragon Oil plc (+44 (0)20 7647 7804)

Anna Gavrilova

Media enquiries

Citigate Dewe Rogerson (+44 (0)20 7638 9571)

Martin Jackson

Sally Marshak

Kate Lehane

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.