Cardinal Resources Re-drills BC-3 on the Bilousivsko-Chornukhinska Prospect

Cardinal Resources has decided to re-drill the #3A well on the Bilousivsko-Chornukhinska (BC) license in the Ukraine.

The BC #3 well was originally drilled by a Ukrainian state entity in 1957 and produced approximately 600,000 Mcf from December 1962 to October 1968 when the well was plugged due to water influx. An attempt to re-enter and work the well over was made by Rudis Drilling Company in 2003 but was unsuccessful. Cardinal acquired 100% of the BC license as part of the Rudis Drilling Company acquisition in October 2005. Based on its review of the technical information, Cardinal determined the BC #3 well should be re-drilled.

The re-drill of the new well, BC #3A, commenced in June 2006. In early August the Visean-17 (V-17) formation was reached at 3,000 meters. Cardinal's evaluation showed non-commercial indications of gas in the V-17. The well was then deepened to 3,300 meters and the evaluation of this lower interval shows the presence of three zones in the Visean section (V-18, V-20 and V-21). No tests have been run to recover gases or liquids yet; but, based upon wireline log analysis, these three zones appear to be hydrocarbon-bearing; and two of the zones are potentially capable of commercial production. The well has been prepared for flow testing zones V-18 and V-20, which will take place over the next 60 90 days.

The BC #3A well was drilled using a Ukrainian rig hybridized with modern drill bits and mud conditioning equipment. The well was expected to take in excess of eight months to drill but was completed ahead of schedule, in just 76 days, due to the use of modern equipment.


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