Victoria Oil & Gas to Begin Re-Entry Work on Three Kemerkol Wells

A contract has been signed with oil services company Smith International for the re-entry of three shut-in wells during December 2005 and the drilling of a single twin well in January 2006. Initial production capacity from these four wells is expected to be around 500 barrels of oil per day with first production expected in Q1 2006.

During 2006, Victoria intends to drill and complete a further seven new wells on the license block, with the potential to take production up to 1,800 barrels per day by the end of December 2006. The Company is also finalising details for a full 3D seismic survey to cover the entire 65 square kilometer license area, which will increase Victoria's understanding of the potential at Kemerkol in addition to the resource already delineated.

West Medvezhye Gas/Gas Condensate Project, Western Siberia, Russia

Mobilization of Wells 106 and 103 is scheduled for December 2005 with drilling commencing Q1 2006 following agreement with oil and gas project managers Atlas International. Under the terms of the Minimum Work Program, a total of two further wells will be drilled at the license by mid-2006.

Well 106 is an appraisal well that will be drilled in the proximity of Well 104 to prove further resources following confirmation by international reservoir auditors DeGolyer & MacNaughton ('D&M') of preliminary expected recoverable resources for the field of 500 billion cubic feet this November (for further information please refer to the Company's website). Well 103 is a second exploration well to test a separate structure on the license block, to the south west of Well 104. Well testing equipment for Well 104 has been acquired by Victoria and is currently en-route to the site for testing to begin at the beginning of next year.

Tamdykol Oil Project, Aktyubinsk Oblast of Kazakhstan

Well 1E, the first of four exploration wells to be drilled at Tamdykol, was completed to a depth of 1,098 meters and was put on test by NEK Service LLP ('NEK'), a local company with whom Victoria signed a farm-out agreement earlier this year to finance and conduct the Tamdykol Minimum Work Program. Testing of the Jurassic intervals intersected is currently on-going, but results from the petrophysical logs and subsequent well tests have so far not indicated the presence of commercial volumes of hydrocarbons. Following analysis of the subsurface data obtained from drilling, NEK have proposed a revision of the farm-out agreement to increase the number of wells to be drilled from four to ten. The proposal from NEK also provides that the term of the agreement be extended from five years to six and a half years in exchange for their commitment to fund and drill additional wells.

Final results of well test and signing of the revised farm-out agreement are expected in December.

Speaking on the projects earlier today, Executive Director William Kelleher said, 'With our significant gas discovery at West Medvezhye and developments at both Kemerkol and Tamdykol, Victoria is finishing 2005 in a strong operational position. Rig availability for West Medvezhye has been better than anticipated and we look forward to D&M reassessing the resource volumes following the further drilling.

'The signing of the contract with Smith for Kemerkol brings our goal of near-term production and cash flow another step closer. We are on target to have oil production in 2006 and Kemerkol has the potential to become a significant cash generator. Meanwhile, the data provided from the first exploration well at Tamdykol has greatly enhanced our knowledge of the subsurface and we look forward to being able to confirm an agreement to extend the farm-out agreement to ten wells as per NEK's request.'

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