The Ministry of Petroleum has approved the company's development-lease application for the new Fadl discovery. Development-lease approval for West Hoshia and South Rahmi is expected over the next few months.
Gross production is currently averaging approximately 2,656 barrels of oil per day for Egypt, which includes contributions from the Hana and Hoshia fields.
The Company has a 70% working interest in the Hana field and a 45% working interest in the Hoshia field.
The Company's fourth horizontal development well at Oudeh Field in Syria spudded on July 7, 2005 and is drilling ahead at 405 metres. The well is planned to have a 600-800 metre horizontal section in the Shiranish carbonate oil reservoir. The Syrian Petroleum Company has approved the company's budget and long-range plan for Oudeh announced on June 27, 2005. Gross production at Oudeh is currently averaging approximately 1,950 to 2,150 barrels of oil per day.
The 90 day field rate test period for Tishrin will conclude in July. Once the company agrees with the initial contract oil rate for the base production, earning activities will be initiated. Production sharing for Tishrin starts after 3 well workovers.
The Company has a 100% working interest in the Oudeh, Tishrin and Sheikh Mansour fields.
Gary Guidry, President of Tanganyika Oil, commented, "Our mandate is execution excellence. We've got continuous drill programs in Syria and Egypt budgeted for and in progress. The focus is growth of cash flow per share and net asset value. We're pleased with the encouraging results from our appraisal program on our new Hoshia field in Egypt and the first development well of our new capital program for Syria is underway."
The Company also reports that the private placement announced on June 27, 2005 has closed. The Company sold on a non-brokered, private placement basis, 5 million shares of the Company at a price of $7.60 per share for gross proceeds of $38 million. A 5% finder's fee was paid with respect to a portion of the private placement. Net proceeds of the private placement will be used for development of the Company's projects in Syria and Egypt and for general corporate purposes. The private placement has received regulatory approval and the securities have been issued to the investors.
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