Epsilon Uncovers Hydrocarbons at Yemen Well, Testing & Drilling Continue

Epsilon has provided the following operations update for Block 41 in the Republic of Yemen.

West Mahrawa #2 - Drilling logs and subsequent initial testing have indicated the presence of hydrocarbons in the well. Initial test results yielded heavy oil with an API gravity of 4.62. Oil samples have been sent for analysis to assist in further evaluation of this well. Testing operations are expected to continue once the evaluation is completed and additional testing equipment is obtained.

Kaninah #1 - This well will be plugged and abandoned after testing operations failed to yield commercial results. The complex geology that was encountered while drilling caused difficulty during both the completion and testing phases of this well. Although drilling logs showed zones with an extensive presence of hydrocarbons, actual testing results failed to confirm commercial flows. Despite these inconclusive results, potential still exists for future exploration on this prospect. Epsilon, along with its partners, will use the data collected to formulate future exploration plans for the Kaninah prospect.

Mukalla #1 - Drilling operations are expected to commence within the next three to five weeks utilizing the rig that just completed the Kaninah well. That rig is currently in the process of being moved to the Mukalla #1. The Mukalla prospect is approximately 15 kilometers east of the Al Waya discovery. The Mukalla #1 represents the Company's final well under its approved 2008 Exploration Program and will be drilled to a planned vertical depth of 2,100 meters.



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