Petroceltic's Algerian Well Exceeds Expectations

Petroceltic announced that fracture stimulation of the AT-8 well on the Ain Tsila discovery in Algeria has further enhanced the substantial pre-facture flow rates announced earlier this month to 38.6 mmscf/d. In addition the well has produced over 1,100 barrels per day of condensate. These results exceed the previous best test results achieved at AT-1 and further confirm the high deliverability achievable in this field.

Following the pre-fracture stimulation results announced on October 3, 2011, the upper Ordovician interval of the AT-8 well was successfully fracture stimulated. The well has subsequently produced 38.6 mmscf/d with 1,181 barrels per day of condensate on a 96/64" choke and with a flowing well head pressure of 1,393 PSIG. Pre-fracture gas flow rates at AT-8 were 15.4 mmscf/d.

Testing of the upper interval will continue at other choke settings to gather additional reservoir performance and fluid data before down-hole pressure gauges are installed and the well suspended. The gauges will be left in the well for one month to record an extended pressure build-up survey, and will be recovered after the testing of the AT-7 well which is next in the rigless testing program.

The AT-8 well was designed to appraise a pop-up feature with a mapped fault system and to test the extent of the hydrocarbon column in the north of the Ain Tsila field. The well, which is the first well to be drilled with the KCA Deutag Rig T-211, is located 5km north east of AT-1 and 4.5km north west of the AT-5 well in an undrilled section of the field.

Petroceltic operates the Ain Tsila field on its Isarene permit (Blocks 228 & 229a) in south eastern Algeria. Petroceltic operates the permit with a 56.625% interest, Sonatrach holds a 25% interest, and Enel holds an 18.375% interest, pending final Government of Algeria ratification.

Brian O'Cathain, Chief Executive of Petroceltic commented, "We are delighted that fracture stimulation has substantially enhanced the excellent flow results at AT-8. This flow rate has been constrained by testing facilities and we estimate that a potential rate in excess of 50 mmscf/d of gas is possible from this well in the production phase. These results exceed the very high flow rates reached in the 2009 AT-1 well tests and further confirm that high deliverability is achievable in this field. The gas flow rates achieved here will have a significant impact on the Field Development Plan which we plan to submit to the Algerian competent authorities by the end of January 2012.

"Our appraisal program is continuing at a rapid pace with AT-7 well test results and the AT-9 well logging and testing scheduled before year end."