Rocksource Reports Progress on US Drilling Campaign

The Rocksource ASA Group recently completed the Morian 3 and Morian 5 wells with encouraging results. These two wells have found and delineated a new hydrocarbon-bearing zone.

The recoverable volume from this new zone is estimated to be in excess of 8 million barrels of oil equivalent (boe). These volumes are now classified as contingent resources, awaiting further development planning and decisions. Two additional wells have been sanctioned, and the first of these, the State of Texas number 3, has already been spudded.

These results furthers the recent successes in the ongoing drilling campaign onshore US through the subsidiaries Rocksource Energy Corporation and Sandhawk Energy LLC. A total of three wells have been drilled since the start of the drilling campaign in December 2006. One well has been put into production (Morian 4) and two are in the process of being put on stream (Morian 3 and 5). The combined production from the Morian 4 well on Drews Landing Field and the old wells on the New Ace Field is in excess of 500 barrels of oil equivalent per day (boepd).

The additional successes through the Morian 5 well and the deepening of the Morian 3 well, substantiates the Group's production targets of reaching a daily production level of 1,000 net equity boe within 2007, and 2,000 net equity boe within 2008.

An update of the different completed and sanctioned wells are given below. All production numbers stated are net equity interest to Rocksource, i.e., after the deduction of royalty to mineral rights owners.

Morian 3 and Morian 5 have found significant gas volumes in a thick and extensive hydrocarbon bearing interval. The zones have low permeability and securing well deliverability is a key focus for the operational team.

The first well, Morian 3, has been successfully deepened to 13.500 ft and completed in the lowermost zones where a new gas reservoir was discovered. Well completion has been more complicated than expected and operations where prolonged due to the higher pressure encountered, but the well has now been acidized and is currently being cleaned up for fracturing. Without stimulation, the well has flowed up to 1.0 MMcfpd (170 boepd) during short tests and it is expected that fracturing will establish a commercial rate.

The second well, Morian 4, was successfully drilled to 11.500 ft and has been producing at a sustained rate in excess of 2.0 MMcfpd (330 boepd) since late February. The sustained rate and pressure is very encouraging.

The third well, Morian 5, was planned to be drilled to 12.000 ft but a decision was taken to deepen it to 12.500 ft as encouraging gas shows was encountered at the deeper intervals. The well has now been completed in the lowermost zones and is currently being cleaned up before a decision on stimulation is taken. The well is intended to be perforated over a number of sands subject to a co- mingling permit being issued by the authorities to establish commercial production rates.

Two further wells have been sanctioned within a similar area, but a different lease unit, State 3, is currently drilling at below 7,000 ft and will now be deviated to penetrate the expected zones at optimum locations. This well is permitted to 13.000 ft and expected to reach final depth late this month.

A further well, Morian 6, is currently being planned for drilling immediately following completion of State 3.

Jacob Sannes, CEO of Rocksource's subsidiaries in the US, said: "The reserves and production growth we have had so far from the drilling campaign, and the recent gas shows from the two last wells, is very encouraging. With the additional sanctioned wells we are targeting increased production and reserves from the Group's onshore assets."