Nautical Spuds Kraken Appraisal Well

Nautical announced that the drilling of the 9/02b-5 well has commenced on the Kraken discovery located on North Sea Block 9/2b.

The appraisal well spudded at 13-30 hrs this afternoon. The well is being drilled approximately one kilometer to the south west of the 9/02-1a discovery well, to further appraise the core area of the field and establish a commercial flow rate.

Initially a pilot well will be drilled, cored and logged. This will be followed by a horizontal sidetrack of up to 600 meters. A Logging Whilst Drilling (LWD) suite will be run over the horizontal section to provide further understanding of the reservoir quality and distribution. The horizontal sidetrack will be completed with a gravel pack and tested using an Electric Submersible Pump (ESP). Upon completion of the drilling program the well will be suspended to be used as a future development well.

The drilling is being performed by the semi-submersible rig the Wilhunter and is expected to take approximately 60 days in total, subject to weather and any operational downtime. The initial pilot well is expected to take 20 days.

Nautical has a 50% interest in North Sea Block 9/2b and is the operator. The other participants are Celtic Oil Limited, a fully owned subsidiary of First Oil Expro Limited (30%) and Canamens Energy North Sea Limited (20%).

Commenting on this announcement Steve Jenkins, Chief Executive Officer of Nautical said, "We are delighted to commence this key activity, which is aimed at confirming Kraken's commerciality. Assuming success, it is our intention to submit a preliminary Field Development Plan (FDP) for the first phase of the development to the Government by September 2011, with a target for full FDP approval by June 2012. Success will represent a significant step towards the commercialization of Kraken."

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