Sky Petroleum PSC Ratified by Albanian Govt

Sky Petroleum has received final approval and ratification for the Production Sharing Contract (PSC) with respect to the three exploration blocks, Four, Five and Dumre, announced on June 24, 2010. The PSC received regulatory approval from the Council of Ministers of the Government of the Republic of Albania and notice has been published on the official government website on November 25, 2010. The company expects the notice will also be published in the official government gazette.

Exploration Blocks Four, Five, and Dumre

The PSC has a seven-year term with three exploration periods. Upon commercial discovery of gas, the agreement allows for development and production periods of 25 years plus extensions at the Company's option.

Block Four is located in southeast Albania, bordering on Greece. The exploration block covers an area of approximately 2,264 km2 (540,000 acres). The area has four identified leads and prospects on the block with a total estimated reserve potential of 350 MMBOE.

Block Five is located in southwest Albania next to the Adriatic Sea and covers an area of approximately 2,076 km2 (498,000 acres). The block has a total of five identified prospects or leads with a total estimated reserve potential of 375 MMBOE.

Block Dumre is located immediately north of the Kucova oil field and covers an area of approximately 623 km2 (149,000 acres). Based on analogous discoveries, it is estimated that the Dumre prospect contains approximately 500 to 700 MMBOE OOIP.