Dragon Oil

Capex

Future Plans

Turkmenistan
The CIS 1 Rig completed the Dzheitune (Lam) 22/124 well on 9th January 2008 with initial production from the two strings of 2,414 bopd with optimisation of the well to follow. The CIS Rig is preparing to drill its second development well, L22/126. In addition, the Company is continuing to refurbish its own drilling rig, Rig 40, for the commencement of drilling operations from the refurbished Dzheitune (Lam) 13 Platform.

Dragon Oil continues the major infrastructure development programme, which includes the construction of additional wellhead platforms, expansion of the NPF, refurbishment of the crude oil export jetty and continued upgrade of existing infrastructure.

In line with its commitment to commercialise the gas resources within the Cheleken Contract Area, Dragon Oil has completed feasibility and design studies. Subject to the necessary approvals, the Company plans to install new offshore and onshore facilities, which will include a 30-inch offshore trunk pipeline to transport the gas and oil onshore. Discussions with the Government of Turkmenistan are ongoing.

Yemen
An exploration drilling programme on our non-operated acreage in Yemen is currently underway with drilling taking place in Blocks 49 and R2. Drilling will commence on additional prospects in Block 35 once drilling has been completed in Blocks 49 and R2.

Production

Total 2007 gross field production from the Cheleken Contract Area was 11.7 million barrels of oil with an average 2007 gross production of 31,997 bopd. This compares to 7.5 million barrels of oil in 2006 and an average gross production of 20,514 bopd. The average sales price in 2007 was US$ 70.9 per barrel (2006: US$ 61.3 per barrel).

Average gross production was 20,514 bopd during 2006, 6% higher than in 2005 (2005: 19,426 bopd), of which 15,115 bopd (2005: 14,008 bopd) was attributable to Dragon.

Reserves

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