Dragon Oil issues the Interim Management Statement in accordance with the EU Transparency Directive. The statement covers the period from 1 January 2009 to date. The financial and production data are for the period from 1 January 2009 to 31 March 2009.

Key highlights - The average daily production rate reached 43,787 barrels of oil per day ("bopd") in Q1 2009, an increase of 19% over the comparable period in 2008 (Q1 2008: 36,784 bopd); - Entitlement barrels in Q1 2009 were approximately 65% of the gross field production compared to 56% in Q1 2008; - Capital expenditure on infrastructure and drilling was approximately US$81 million for Q1 2009 (Q1 2008: US$61 million); - Financial position of the Group with the cash balance of US$833 million at the end of Q1 2009 continued to be strong with no debt.

Dr Abdul Jaleel Al Khalifa, CEO, said,"Dragon Oil continues to increase production and we achieved a 19% increase in the gross production in Q1 2009 compared to Q1 2008. The two wells currently being drilled by Rig 40 and the Iran Khazar rig are expected to be completed and come on stream in May this year and add to the production from the existing wells. We expect to complete eight wells in 2009. The recent extension of the contract for the Iran Khazar rig and good progress in the tendering process for another platform-based drilling rig make us confident in proceeding with our drilling programme."

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