Vintage Petroleum Completes An Nagyah #7 Well in Yemen

Vintage Petroleum reports that the An Nagyah #7 appraisal well in the Republic of Yemen has completed drilling. The well was drilled to continue the evaluation of the sub-salt Upper Lam formation and is the third consecutive successful well drilled at the company's An Nagyah field this year.

The An Nagyah #7 well was drilled to a total depth of 4,593 feet (1,400 meters). Electric log analysis indicates a gross interval of 144 feet (44 meters) that is oil bearing in this well. An 89 foot (27 meter) interval in the Upper Lam formation was perforated between 3,366 and 3,478 feet (1,026 to 1,060 meters) and testing is underway.

The rig is being moved to a drilling location near the company's Harmel #1 discovery well. The purpose of the Harmel #2 well is to improve understanding of the productive formations and aid in determining the aerial extent of those formations encountered in the discovery well, drilled in late 2000. 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. 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. The company has met its near-term target to increase daily production to 2,500 barrels gross (1,300 net) during 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 early 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.