Dragon suspends drilling but confident of production growth

Dragon Oil has announced the temporary suspension of drilling on one of its wells on the LAM 21 platform in the Cheleken block, offshore Turkmenistan.

Well 21/106 has been plugged and temporarily suspended due to technical reasons, the company informed the Irish Stock Exchange today.

Due to these technical reasons the well was sidetracked twice before being drilled to a total depth of 3,197m. Notwithstanding, oil and/or gas bearing sands were logged in the upper reservoir zones 3, 4 and 5.

Dragon said it will continue with its drilling programme on the LAM 21 platform and expects to spud well 21/107 at the end of this month.

It is intended to drill this well to a minimum total depth of 3,540 m, with an option to extend to 4,200 m.

The company intends to re-evaluate options to complete well 21/106 later this year.

Chairman Hussain M. Sultan said today: "While we have encountered some difficulties in drilling our first well from the LAM 21 platform, we have gained much useful information and data that will assist us with future wells.

"I am confident that we can achieve production growth for 2004 as a result of our continuous drilling programme," he added.