Dragon Oil : Drilling and Production Update

RNS Number : 6660S

Dragon Oil PLC

10 July 2015

10 July 2015

DRAGON OIL PLC

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

Drilling and Production Update

· Average gross production of approximately 92,060 barrels of oil per day (bopd) in 1H 2015;

· Average gross production of approximately 98,890 bopd in June 2015;

· Gross production rate of 100,658 bopd achieved on 9 June 2015;

· Guidance on gross production growth in 2015 updated to be around 15%.

Dragon Oil plc (Ticker: DGO), an international oil and gas exploration, development and production company, today publishes an update on the drilling activity and production numbers for 1H and June 2015 in the Cheleken Contract Area, Turkmenistan, and exploration activity in Block 9 in Iraq.

Turkmenistan

Since the previous quarterly drilling update published on 21 April 2015, Dragon Oil has the following update on the drilling programme:

Post completion of the Dzheitune (Lam) 22/194 well by Land Rig1 in December 2014, an additional perforation was performed in late May followed by jet pump application in early June resulting in current production of 1,398 bopd.

Production has been added through additional perforations in certain existing wells as well as four jet pump installations in the area.

The Caspian Driller is expected to commence operations in 3Q 2015.

Iraq

In 2014, the partners in Block 9 in Iraq (Dragon Oil 30%) announced the discovery of oil in two formations in the consortium's first exploration well, Faihaa-1. Open and cased hole tests were conducted in the Mishrif and Yamama formations with encouraging results. The well has been tested at 5,230 bopd on a 32'/64'choke from the Yamama reservoir. A production completion has been run in the well and the drilling rig has been released.

The consortium plans to drill two additional appraisal wells in 2H 2015 in order to fast track the development.

Production

The average gross field production in the Cheleken Contract Area for 1H 2015 was approximately 92,060 bopd (1H 2014: 73,440 bopd).

On 9 June 2015, the Dragon Oil Group produced above 100,000 bopd for the first time, at 100,658 bopd, thus reaching its previously announced production target for 2015. Production has since been at just under 100,000 bopd level resulting in the average gross production for June 2015 of 98,890 bopd (June 2014: 76,100 bopd). Dragon Oil anticipates that production will on average be around the 100,000 bopd level until the end of 2015.

On 15 June 2015, Dragon Oil updated its target for average production growth for 2015 to be around 15%. Dragon Oil confirms its previous guidance to achieve average daily gross production in 2016 of 100,000 bopd and to maintain this rate as a plateau for a minimum of five years from 2016.

The Trading Statement is due for publication on 14 July 2015.

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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

About Dragon Oil

Dragon Oil plc is an international oil and gas exploration, 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 and gas producing fields, Dzheitune (Lam) and Dzhygalybeg (Zhdanov).

The Group has exploration blocks in Iraq, Algeria, Afghanistan, Egypt, Tunisia and the Philippines. Dragon Oil's diversification strategy is to add exploration and production assets within Africa, parts of Asia and the Middle East in order to create a diversified and balanced portfolio of assets for the Group.

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.

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