Vintage Petroleum Strikes Again in Yemen

Vintage Petroleum reports that the An Nagyah #6 well in the Republic of Yemen has tested light (42 degree API) oil from the sub-salt Upper Lam formation. The well, an appraisal well to the An Nagyah #2 and An Nagyah #4 wells, was drilled to continue the evaluation of the sub-salt Lam formation and is the second consecutive successful well drilled at the company's An Nagyah field this year.

The An Nagyah #6 well was drilled to a total depth of 3,960 feet (1,207 meters). Electric log analysis indicates a gross interval of 95 feet (29 meters) that is oil bearing in this well. A 43 foot (13 meter) interval in the Upper Lam formation was perforated between 3,412 and 3,455 feet (1,040 to 1,053 meters) and tested at a stabilized flow rate of approximately 1,140 barrels of light, water-free oil and 480 thousand cubic feet of natural gas per day with a flowing tubing pressure of 455 pounds per square inch. The Upper Lam interval tested in the An Nagyah #6 correlates to the interval in the An Nagyah #2 discovery well, which tested 1,091 barrels of oil per day and to the An Nagyah #4, that tested 1,320 barrels of oil per day in 2003. "We are encouraged by the results of the An Nagyah #6 which, along with the results of the previous wells, indicates the continuity of the Upper Lam sands and provides continued encouragement about the reserve and production potential which we expect to result from full field development," said Charles C. Stephenson, Jr., CEO.

With testing nearly complete at the An Nagyah #6 well, initial production is targeted for early May. The rig is being moved to the next drilling location, the An Nagyah #7 well. The purpose of the #7 well is to delineate the extension of the An Nagyah structure to the west of the An Nagyah #5 well, currently the company's westernmost productive well. The An Nagyah #7 well is targeted to spud during May. Approximately $10 million of Vintage's total non-acquisition capital budget of $225 million is allocated to the drilling of seven wells in Yemen during 2004. Included in this total is an allocation of $1 million for the drilling of an appraisal well near the company's Harmel discovery to improve understanding of the productive formations and aid in determining the aerial extent of those formations. Vintage is the operator and has a 75 percent working interest in the 285,000 acre Commercial Development area within the S-1 Damis block.

Field production operations were begun in late March when the An Nagyah #4 well was placed on production and the oil trucked 18 miles to a nearby pipeline facility for transportation to an export terminal. With the addition of the An Nagyah #5 and #6 wells, combined gross productive capacity from the three wells exceeds 3,000 barrels (1,560 net) of oil per day. This productive capacity supports the company's plan to increase daily production to 2,500 barrels gross (1,300 net) late in the second quarter 2004 and to truck the production to the nearby facility until the permanent pipeline and processing facility is completed next year. Vintage will spend approximately $17 million during 2004 for design and construction of a pipeline and processing facility at An Nagyah, anticipated to be completed in the second quarter of 2005, to permit the production of greater volumes and streamline transportation. The processing facility is being designed to process 10,000 gross (net 5,200) barrels of oil per day, with the potential to expand as additional capacity is warranted.