Tanganyika to Sell Shares to Fund Oudeh Field Development

Tanganyika Oil Company has agreed to sell, on a private placement basis, up to an aggregate of 3 million shares of the Company at a price of $6.30 per share for gross proceeds of $18.9 million. Upon closing of the private placement, the Company will be in a strong cash position and well funded for its work on the Oudeh Field and general working capital.

The Oudeh Field is a large development block located in northeastern Syria containing an estimated 2.4 billion barrels oil in place (Sproule, June 2003). As the field is fully developed total production levels are expected to reach over 30,000 barrels of oil per day (Sproule, June 2003).

Tanganyika recently completed a successful well workover program that initiated the first incremental oil production. The Company will continue its fast track development of the field. Preparations are now underway for additional well workovers as well as new drilling, including horizontal drilling. Horizontal drilling technology offers the potential to greatly enhance well productivity. To assist with the planning, the Company has recently completed reprocessing of an extensive 2D and 3D seismic database. The Company plans to augment this database by shooting 3D seismic across the whole field area in mid-2004.

Lukas H. Lundin, President of Tanganyika Oil, commented: "It's full steam ahead for the Oudeh Field. We are pursuing a rapid development of the Field and expect to ramp up production significantly over the coming months. On closing of the private placement, Tanganyika will be well-funded to meet its objectives."

The foregoing private placement is subject to regulatory approval.