Reserves

A report from an independent energy consultant certified that the remaining recoverable proven and probable oil reserves were 625.2 million barrels of oil and condensate and 3.1 trillion cuft of gross contingent gas resources as at 31 July 2009 in the Cheleken Contract Area.  Proved and probable remaining recoverable reserves as at 31 December 2009 on a working interest basis and an entitlement basis were 617 million barrels and 282 million barrels respectively.

By the end of 2011 Dragon Oil intends to drill on a previously undrilled structure located to the south-west of the Cheleken Extension structure.  This structure was mapped before using 2D seismic data shot during the early 1990’s but it has looked more pronounced after remapping the same structure using 3D seismic conducted in 2004-5.  Should this well be successful, it will prove up more reserves, and this area will be incorporated in to the field development plan.

Following completion of the gas facilities and a gas sales agreement in the future, it is expected that Dragon Oil will be able to confirm the proportion of contingent gas resources that can be transferred to reserves.