Dragon Oil plc (“Dragon Oil”), an independent oil development and production company, registered in Ireland, provides drilling and operations update.

Highlights

• Dragon commissions its first wellhead and production platform in the LAM field;
• Gross peak production record of 28,025 barrels of oil per day ('bopd') has been achieved;
• Dragon’s 16th development well, 13/116, has been completed using the ’Astra’ jack-up rig from the LAM 13 platform, was tested and is producing 2,501 bopd;
• The workover of well 22/22 has been successfully completed from the LAM 22 platform, using the hydraulic workover unit, and the well is producing 1,210 bopd;
• Production gain of 808 bopd has been obtained from the successful wireline workover of well 10/57 from the LAM 10 platform; and
• The ’Astra’ has spudded a second development well, 13/118, from the LAM 13 platform.

Hussain M. Sultan, Chairman and CEO of Dragon commented:

“There has been a big push within Dragon throughout 2006, both in terms of increasing production and improving infrastructure. In particular, the Company has installed the new LAM ‘A’ platform and it is now ready for drilling. We expect the ‘Iran Khazar’ jack-up rig to start drilling a series of development wells from it shortly. Construction of this platform is a major achievement and opens new and exciting opportunities for Dragon in 2007.

I am particularly pleased that we have reached a new peak production of over 28,000 bopd for the Cheleken Contract Area as a whole. We have pushed on from earlier peaks and continued to achieve new milestones for the Company.

It is also pleasing that the Company has two jack-up rigs working simultaneously for the first time in Dragon’s history and that the ‘Astra’ rig has completed its first well. The Company completed 4 wells during 2006 and is now close to completing another development well. We are working on keeping both jack-up rigs for as much of 2007 as possible, enabling us to further accelerate our development programme.”