Sea Dragon: Activity Level at Kom Ombo Concession at Peak

Sea Dragon has provided the following update on its operations in Egypt.

NW Gemsa concession - AI Amir SE No. 7 well

The AI Amir SE #7 well was spud on November 27th. The well has reached the 9 5/8" casing point just below the Kareem Formation top. Preliminary petrophysical analysis of the logs run indicate 6 feet of oil pay in South Gharib Formation, extending the AI Amir South Gharib oil pool to the west. Casing was set at 9,650 feet and the well is now drilling below 10,960 feet towards the targeted depth of 16,750 feet.

The primary target for this well is the Kareem Formation and the secondary target is the Lower Rudeis Formation where gas and condensates were tested in the adjacent AI Amir SE #6 well and also encountered in the AI Ola X-l well. The well is expected to delineate the western limits of the AI Amir SE field and is anticipated to be completed as a water injector in preparation for commencing water injection in the field. Water flooding of the AI Amir field is expected to provide significant additions to reserves and production.
Production from the AI Amir SE and Geyad fields is currently running steady at around 8,500 bopd. Cumulative production from the concession has now reached 4.2mmbbls of 42 degree API crude oil.

Sea Dragon has a 10% working interest in the NW Gemsa Concession with Vegas Oil at 50% as operator and Circle Oil Pic with 40%.

Kom Ombo Concession

AI Baraka #11 Well

The well was completed in the Six Hills "E" Formation and placed on production.

AI Baraka #3 and #7 Wells

These two wells have now been fraced and nitrogen lifted for clean up. Down-hole tubulars are being reinstalled in preparation for placing the wells back on production.

AI Baraka #5 Well

This well is currently being tied in and will be placed on production shortly.

AI Baraka SE-1 Well

This well is currently shut in with a parted rod string. It is scheduled for a work-over operation following which the well will be returned to production. The areal extent of the Kom Ombo sands is currently being evaluated with the view of identifying future development drilling locations.

Al Baraka #13 Well

The well was spud on December 12th and drilled to its total depth of 4,800 feet. The main target being the Abu Ballas Formation was successfully encountered but was found to be in pressure communication with the AI Baraka #1 well. Since the Abu Ballas reserves are already being adequately recovered from the AI Baraka #1, the well was plugged and abandoned.

Memphis-1 Well

The Memphis-1 exploratory well was spud on December 27, 2010 and drilled to its total depth of 5,200 feet in the basement. It is the first of a three exploratory well commitments to be drilled outside AI Baraka development lease. The well site is located some 28 km northwest of the AI Baraka field and was drilled to test a structure in the northern extension of the Kom Ombo basin.

Excellent reservoir quality rocks were encountered in the Abu Ballas and Six Hills Formations. However, no commercial hydrocarbons were observed and the well was plugged and abandoned.

Exploratory drilling will now move to the south into the general area of the AI Baraka field in closer proximity to the oil Kitchen where several prospects are already mapped.

Current gross production from the AI Baraka field is running at 900 bopd. With the placement of the newly fraced wells back on production along with AI Baraka #5 and AI Baraka SE-1 well, production should begin to rise significantly.

Sea Dragon has a 50% working interest and is a joint operator of the Kom Ombo Concession with Dana Gas Egypt owning the remaining 50%.

Commenting on the latest developments on the Company's operations in Egypt, Company Chairman and CEO, Mr. Said Arrata stated, "Our activity level in Kom Ombo is at its peak with the ongoing fracture stimulation program and the completion and placement of new wells on production. Thus far eleven wells have been drilled in the AI Baraka field, ten of which have been completed as commercial oil producers for an exceptional success ratio of over 90%. We are continuing the drive towards maximizing production and cash flow from both our concessions in Egypt."