Infrastructure Update

FOR IMMEDIATE RELEASE

9 December 2010

DRAGON OIL PLC

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

Infrastructure Update

Completion of 30-inch 40 km trunkline and Phase 2 expansion of Central Processing Facility

·; 30-inch 40 km trunkline has been completed and commissioned

·; Phase 2 expansion of Central Processing Facility is completed with commissioning to be finalised shortly

Dragon Oil plc (Ticker: DGO), an international oil and gas exploration and production company, announces the completion of key infrastructure projects being the 30-inch 40 km trunkline and Phase II expansion of the Central Processing Facility ("CPF").

The 30-inch 40 km trunkline, which runs from Block II to the CPF, has been completed and commissioned. It supplements the two existing 12-inch trunklines enabling us to bring gas and liquids onshore. Our plan is to switch over gradually from the existing 12-inch trunklines to the new 30-inch trunkline to ensure the smooth running of the system while we perform the transition. The two 12-inch trunklines will be maintained in a working condition for future use.

The Phase 2 expansion of the CPF has been completed. Commissioning is currently under way, with considerable gas being delivered onshore, and will be finalised by the end of this month. The capacity of the CPF has been doubled to allow the handling of up to 100,000 barrels of liquids per day with capacity to handle up to 220 mmscfd of gas.

As part of the trunkline project, we are currently completing additional associated in-field pipelines from the Dzheitune (Lam) 28 platform to the Dzheitune (Lam) A platform (18-inch) and from the Dzheitune (Lam) A platform to Block II (20-inch), likewise we are completing the 14-inch in-field pipeline from the Dzheitune (Lam) B platform to the Dzheitune (Lam) 28 platform. These additional in-field pipelines will allow throughput capacity to be increased and will help accommodate future development of the western area of the Cheleken field. We anticipate the commissioning of these in-field pipelines before the year-end.

The 30-inch trunkline and the expanded CPF will enable Dragon Oil to deliver unprocessed raw gas to the Turkmen gas pipeline system.

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

"I am delighted to report the completion of the trunkline and Phase II expansion of the CPF. This represents an important milestone for Dragon Oil and, in particular, will help eliminate certain infrastructure bottlenecks, which have impacted production growth this year. We are already flowing some oil and gas through the new trunkline and are preparing to switch over completely from the two existing pipelines. We expect the new infrastructure to be fully operational before the end of the year. Dragon Oil will continue to upgrade and develop the infrastructure base to underpin production growth in the years ahead."

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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).

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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.