Sea Dragon Provides an Operational Update on Egypt

/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/

CALGARY, Sept. 28, 2011 /CNW/ - Sea Dragon Energy Inc. ("Sea Dragon" or the "Company") (TSXV: SDX) is pleased to provide the following update on its operations in Egypt.

NW Gemsa Concession

Al Ola -2 Well:
The well was spud on September 1st, 2011 and successfully reached its 9 5/8" casing depth of 9,390 feet. Casing was run and cemented and the well resumed drilling to a depth of 10,002 feet. Two 60 foot cores were then cut in the Kareem Formation in the interval 10,002 feet to 10,122 feet. This is the third of four water injection wells planned this year for the Al Amir SE field for the secondary recovery project by water flooding. The well is located approximately one km west of Al Ola X-1 well and is targeting the water leg of the Kareem Formation. It will be drilled to a total depth of approximately 10,800 feet in the Upper Rudeis Formation.

Geyad-5 Well:
The Geyad-5 water injection well was successfully drilled to its total depth of 7,030 feet in the Upper Rudeis Formation. This well is located approximately 1.1 km west-south west of Geyad-1X and 2 km west of the recently drilled Geyad-3C producer. The well successfully penetrated the Kareem Formation water leg as prognosed. The Shagar and Rahmi sands were perforated in the intervals 6510-6525 feet and 6583-6599 feet respectively. In addition, the South Gharib Formation looks prospective and is currently being evaluated.

Water Injectivity tests are now underway with continuous water injection expected to commence in Q-4, 2011. This marks the beginning of the water flood project which will result in significant increase in recoverable reserves and production levels from the field.

Current production from the Al Amir SE and Geyad fields is running steady at around 7,600 bopd (760 bopd net to Sea Dragon).  Cumulative production from the NW Gemsa Concession has now exceeded 6.2 million barrels of 42 degree API Crude oil.

Sea Dragon has a 10% working interest in the NW Gemsa Concession with Vegas at 50%, as operator, and Circle Oil PLC with 40%.

Kom Ombo Concession:

Geological, geophysical and engineering studies are continuing. Basin Analysis has confirmed the presence of a rich source rock in the basal Kom Ombo Formation. Oil expulsion and migration information is being used in the selection of new exploratory wells.

A new structural model for the Al Baraka field shows yet untested flank areas with multiple zone potential. The new mapping will form the basis for locating the development wells planned for the fourth quarter, 2011 and into 2012.

Discussions are ongoing for securing a new drilling rig and ancillary services to be mobilized to Kom Ombo and begin operations during the fourth quarter. All tubular and supplies have already been ordered and are now available.

Production from the Al Baraka field is approximately 700 bopd (350 bopd net to Sea Dragon).

Sea Dragon has a 50% working Interest and is a joint operator of the Kom Ombo Concession with Dana Gas owning the remaining 50%.

Commenting on the latest developments on the Company's operations in Egypt, Company Chairman and CEO Mr. Said Arrata stated "We are anxiously awaiting the resumption of our drilling activities in the Kom Ombo area now scheduled for the fourth quarter. The results of our recent studies are very encouraging indeed and should provide good guidance for the selection of future exploratory and development wells. I am also very pleased with the progress made on drilling the water injection wells in the Al Amir SE and Geyad fields. With the commencement of the water flood project later this year we should begin to see a substantial increase in our production in 2012".

Certain statements contained in this press release constitute "forward-looking statements" as such term is used in applicable Canadian and US securities laws. These statements relate to analyses and other information that are based upon forecasts of future results, estimates of amounts not yet determinable and assumptions of management. In particular, statements concerning the development of the Al Baraka field and events or projections referenced or implied herein should be viewed as forward-looking statements. 

Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or are not statements of historical fact and should be viewed as "forward-looking statements".  Such forward looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.  Such risks and other factors include, among others, costs and timing of exploration and production development, availability of capital to fund  exploration and production development; political, social and other risks inherent in carrying on business in a foreign jurisdiction, the effects of a recessionary economy and such other business risks as discussed herein and other publicly filed disclosure documents.  Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended.  There can be no assurance that such statements will prove to be accurate as actual results and future events could vary or differ materially from those anticipated in such statements.  Accordingly, readers should not place undue reliance on forward-looking statements contained in this news release.

Forward-looking statements are made based on management's beliefs, estimates and opinions on the date the statements are made and the Company undertakes no obligation to update forward-looking statements and if these beliefs, estimates and opinions or other circumstances should change, except as required by applicable law.

This news release contains forward-looking statements based on assumptions, uncertainties and management's best estimates of future events.  When used herein, words such as "intended" and similar expressions are intended to identify forward-looking statements.  Forward-looking statements are based on assumptions by and information available to the Company.  Investors are cautioned that such forward-looking statements involve risks and uncertainties.  Actual results may differ materially from those currently anticipated.  The forward-looking statements contained herein are expressly qualified by this cautionary statement.

NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THE RELEASE.

SOURCE Sea Dragon Energy Inc.

For further information:

Said Arrata      
Chairman, CEO and Director    
(403) 457-5035      
Tony Anton
President, COO and Director
(403) 457-5035
Olivier Serra
Chief Financial Officer and Director
+331 5343 9442

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Sea Dragon Energy Inc.

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