Anyone into oil

This looks like very good news.....happy new year?RNS Number:5452W
Dragon Oil PLC
2 January 2001


02 JANUARY 2001

DRAGON OIL PLC

DRILLING BEGINS OFFSHORE TURKMENISTAN

'Dragon Oil announces today that it has commenced drilling the first of three
planned wells on the Lam Field, in the Cheleken Contract Area, offshore
Turkmenistan in the Eastern Caspian Sea. The well is being drilled using a
converted land rig, which has been upgraded to meet the safety and technical
requirements of the project. The rig has been installed on the existing Lam-22
platform, which has recently been strengthened and refurbished. Funding for
the programme will be provided under the EBRD project financing facility
signed in December 1999.

The first well, designated Lam 22-101, is expected to take 60 days to drill
and a further 30 days to complete. The well is targeted to extract reserves in
the Red Series formation of the Lam Field, which were proven by the previous
operator, but were not developed. Oil is anticipated from a depth of
approximately 2000 meters to the proposed total depth of approximately 4300
meters. The well may be deepened to 4600 meters if conditions permit. The oil
produced will be processed through the existing infrastructure. Following Lam
22-101, the Company intends to drill a further two wells in this initial
development program. Lam 22 has the scope for a total of six newwells if the
results of the initial wells justify further drilling.

The Company believes there is very significant potential in the Cheleken
Block, where proven and probable reserves were independently certified as
being approximately 600 million barrels of oil and 2.2 trillion standard cubic
feet of gas. Lam 22-101 is the first well to be drilled on the Block since the
late 1980's and will be the first well to be drilled using conventional
western drilling technology.

Earlier in the year Dragon achieved improvements in the Lam field's production
through a wireline intervention program. Production has since averaged
approximately 7500 barrels per day from 17 producing wells. The oil produced
is a 37 API gravity crude with virtually no sulphur, which is in high demand.
The Company exports its share of this production through a swap deal with
Iran, which has operated successfully since July 1998. A new 10 year swap
agreement was signed in April 2000, and the Company plans to export all of its
future production by this means as the system is being progressively upgraded
to increase capacity.'

Further statements will be issued confirming the presence of oil and detailing
initial flow rates in due course.

Ian Baron, Chief Executive of Dragon Oil, commented:

'This is an important stage in Dragon's development and is the culmination of
the many positive changes made to the Company in the past year with the
support of our major shareholder, Emirates National Oil Company (ENOC). We
have built a strong new team, negotiated a new PSA, concluded financing
arrangements and completed a range of technical studies essential to the
development of the fields. I expect the outcome of the drilling programme to
be a material increase Dragon's oil output which will have consequent positive
implications for the company's future cashflow and earnings potential.
Turkmenistan has an attractive investment climate and is a good place for us
to operate, and I want Dragon to embark on new projects here in the future.'

Further information:

Dragon Oil (+353 1 676 6693) - Citigate Dewe Rogerson (+44 20 7638 9571)

Ian Baron, Chief Executive Officer - Martin Jackson / Sara Thomas

END