Paladin Makes Discovery Adjacent to Arkwright Field

Paladin reports that exploration well 22/23a-7 drilled on the Brechin prospect, 3.5 km to the east of the Arkwright Field, is an oil discovery.

The well, the first exploration well to be operated by Paladin in the UK sector of the North Sea, penetrated an oil bearing zone of at least 110ft in the Palaeocene Forties Sandstone, the producing horizon in the nearby Paladin-operated Montrose, Arbroath and Arkwright Fields. Reservoir quality is in line with pre-drill expectations with average porosity of 22 percent and a net:gross ratio of ca.78 percent.

A comprehensive suite of log and pressure data has been acquired and the well is being suspended for potential use as a future producer. As the discovery is structurally well-defined on existing 3D seismic data, an early decision on the development of Brechin as a sub-sea satellite to the Arkwright Field is anticipated. The well results have also upgraded the potential of a comparable prospect 2.5 km to the south, which is now a candidate for early drilling.

Participants in the well were Paladin Expro Limited (58.97436 per cent), a wholly owned subsidiary of Paladin, and Energy North Sea Limited (41.02564 per cent). Paladin's share of well costs were met by Energy North Sea under the terms of an exchange agreement entered into by both parties in late 2003 to align their interests in the acreage adjacent to the Montrose, Arbroath and Arkwright Fields.

Roy Franklin, Chief Executive of Paladin, commented:

'This is another excellent well result for Paladin and Energy North Sea to follow our recent success on North Montrose, and is further demonstration of the organic growth potential in the Monarb area. We will now be assessing the scope for the earliest possible development of Brechin as a satellite to the Arkwright Field; as incremental production through our existing facilities, these will be high value barrels.'