Centurion Says Egypt Wells Encounter Non-Commercial Hydrocarbons

El Wastani Fields
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Centurion Energy says three new wells have now been tested: El Hamra-1 and El Deeb-1 were located on the new West Manzala exploration concession and El Wastani West-1 ('EWW-1') was located on a new seismic feature within the El Wastani development lease but separate from the structures currently producing in the El Wastani Field.

All three wells were exploration tests exploring new targets based on seismic interpretation. Each well encountered hydrocarbon shows, however none will be completed for production.

All three wells encountered good quality reservoirs in the Upper and Lower Abu Madi formations, however logs did not indicate hydrocarbons. The wells encountered good Upper Qawasim reservoirs with gas and oil shows. Of particular interest, a cored interval in the EWW-1 well was oil-stained and light oil was recovered from the shale shaker table during drilling of the original hole. That interval could not be tested due to mechanical and drilling difficulties. Two side tracks were drilled subsequently, the first had to be abandoned and the second which was drilled approximately 125 meters away reached total depth in a different fault block from the first two attempts. Testing did not recover any commercial quantities of hydrocarbons. Data is being reviewed to determine if a future location can target the zone in the original fault block that had the significant oil shows in the first well bore. The Upper Qawasim reservoir in the El Hamra and the El Deeb wells had hydrocarbon shows but did not produce commercial quantities.

The Lower Qawasim and Sidi Salim formations were originally a target of the above three wells. High pressure and mechanical limitations did not allow the wells to be drilled to fully penetrate and evaluate these formations, where significant reserves have been found in nearby onshore and offshore fields. As a result, a new well design, to allow for deep drilling, is being developed. The design requires larger diameter tubulars which have now been ordered with a September 2006 expected delivery date.

Although the first drilling results outside of the El Wastani field area have been disappointing, the two wells in the West Manzala concession were just the first of several wells planned. On the west side of the concession it now appears that the seismic signature is not the same as in the El Wastani development lease and that the most likely producing intervals will be at deeper depths.

The next locations to be drilled have been selected east of the El Wastani development lease on prospects that are on trend with existing Abu Madi and Qawasim discoveries. These prospects do not require additional new tubulars.

Acquisition of a 560 km2 3D seismic program over the West Qantara concession started on May 5 and should enhance the current prospect inventory.

Said Arrata, President and CEO states, "We are in the early stage of exploring the West Manzala and West Qantara concessions which total approximately 800,000 acres and we see the potential for several large prospects with multi-zone targets which are yet to be evaluated".

Current production in Egypt is approximately 34,000 boepd. Production has varied since year end as we try to balance the temporary production facilities. Construction of the permanent facilities continues and we expect to have the permanent gas plant on stream during the 3rd quarter, and the turbo expander which will allow Centurion to capture all natural gas liquids and condensate for its account should be commissioned during the 4th Quarter. When all facilities are in place, Egyptian production without new discoveries should be about 38,000 boepd.

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