Calvalley Petroleum Gets Go Ahead on Block 9, Yemen

Calvalley Block 9, Yemen
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Calvalley Petroleum, Operator and 50% working interest owner of Block 9 in the Republic of Yemen, is pleased to announce that it has received approval from the Ministry of Oil and Minerals for the commercial development of Block 9.

The development area encompasses all of the Al Roidhat, Auqban, Hiswah, Qarn Qaymah and Ras Noor discoveries, as well as a significant number of additional prospects that will be drilled over the next several years. The Company and its joint venture partners received approval to retain for development approximately 63% of the 3,546 sq kms that was held previously under the exploration phase. This very high level of retention represents one of the largest percentages of conversion from exploration concession to development area, to date, in the Republic of Yemen. The Development Area of 2,234 km2, more than 552,000 acres, is equivalent to almost 24 townships of land by Canadian land standards. The development and production period extends to 2025 with an optional five year extension.

Initial field development will be focused on the Hiswah oil field, which was Calvalley's first discovery in Yemen and into which six wells have already been drilled. The current development plan provides for production commencing later this year by trucking to one of three export pipeline alternatives. The Company intends to drill at least four more wells in the field prior to the end of 2005. The initial phase of Central Processing Facilities (CPF) will commence construction immediately for completion prior to year end. Hiswah field development is expected to consist of approximately 25 wells, which number may be adjusted as additional reservoir information is obtained from new drilling and from the interpretation of the recently acquired 63 sq km of 3D seismic over the Hiswah field.

Late this year the Company intends to finalize plans for the construction of a pipeline with sufficient capacity to transport production from early development of other existing and future discoveries. It is anticipated that expansion to the CPF and the export pipeline will be operational during the 4th quarter of 2006.

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