Aurado Completes Testing East Tegen-2 on Liman Block

Liman Block, Caspian Sea
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Aurado Energy has completed testing of the lower possible pay-zone within the East Tegen-2 well, on the Company's 90%-owned Liman Block in western Kazakhstan. The zone, at 410 meters, tested 100% salt water (specific gravity of 1.18) and will thus be sealed off. Water will be replaced with formation fluid from the 372-meter level, and production from that level will continue using a sucker-rod pump. At a later stage, this well will be optimized using radial drilling techniques to extend the drainage radius and to circumvent possible near-wellbore damage.

Drilling of the fourth East Tegen well, designated East Tegen-3, will commence shortly. The drilling rig is en-route from northern Kazakhstan where it has finished a 5-well program for another company, and will now be used to drill a minimum of 2 additional wells on the East Tegen structure. The East Tegen-3 well is located due west of East Tegen-2 and is expected to encounter oil in the same shallow zone. Drilling of this well is expected to take 15 to 18 days. Further drilling locations have been identified at shallower levels (Albian Sand) in a separate fault block in the eastern flank of the East Tegen Field. Aurado's operating subsidiary in Kazakhstan, Liman Caspian Oil BV, plans to drill a minimum of 7 wells in the post-salt section of the Liman Block during 2004.

The Company's third well in the Liman Block, designated East Tegen-5, tested minor volumes of oil and gas but mainly water, indicating that this well penetrated the oil water contact in the upper zone. Based upon the results of the testing of the East Tegen-2 well, East Tegen-5 will be plugged and abandoned, and East Tegen-1 will be worked over only in the upper zone.

Aurado's geo-science team is working with 2 Russian-based groups to obtain additional data and high-grade other prospects within the Liman Block. This work will support longer term planning for the development of both the post-salt (shallow) and pre-salt (deep) sections of the Block. The Liman Block has more than 50 recognized post-salt prospects, some with oil indications in the shallow section as demonstrated (but not produced) from Soviet-era stratigraphic test drilling.

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