Indusmin Energy Completes Pilot Production Development

Indusmin Energy reports that the Lvyv Institute of Geological study has completed the Engineering of the Project for Pilot Production of the Krasnopolanske gas field in the Autonomous Republic of Crimea. The report confirms the estimated reserves of 400 million cubic meters and recommends an operational outflow of 28,000 cubic meters per day for well #5 and 25,000 cubic meters per day for well #11 for an optimum exploitation of the reservoir.

The Company is also please to announce that it has received technical documentation from 6 engineering firms (4 out of Ukraine and 2 out of Canada) for the pre-selection process on the tender for engineering of a Gas Treatment Plant (GTP) project, with a further tie-in to the main pipeline that runs less than 8km from the Krasnopolanske field. Based on such data the Company has pre-selected one firm from Ukraine and a second one from Canada as the most qualified bidders. The definitive winner will be announced on April 25th. The GTP will have an initial capacity for processing of 100,000 cubic meters per day as stable outflow, and will be upgraded as new wells are commissioned into production the GTP project is scheduled to be completed during August 2004.

On the gas marketing front: Company's executives are currently in Ukraine for a final round of negotiations with Krymgas on the long term Gas Sales Agreement and on the installment of a JV for handling all hydrocarbon products from the Krasnopolanske field. Final agreements are foreseen to be completed by the end of May 2004.

"With the Pilot Production Project Indusmin is getting all geological permits needed to actually exploit the Krasnopolanske field and is also achieving an important milestone in the process of selling the hydrocarbons. The Pilot Production Project also contents all the technical data required for developing the Engineering project for the Gas Treatment Plant which will put the company only one step away of getting revenues from gas sales," Carlos Munoz, President and CEO.