Toreador Spuds Ayazli-1 Well Offshore Turkey

Toreador Resources and its partners Stratic Energy Corporation and TPAO, the Turkish national oil company, have spudded the Ayazli-1 exploratory well on the South Akcakoca prospect in the shallow waters of the western Black Sea offshore Turkey. The drilling, logging and, if warranted, testing of the well are expected to be completed in August.

Located about five miles offshore, the Ayazli-1 is being drilled to an approximate total depth of 6,600 feet in 250 feet of water by the "Prometheus" jackup rig supplied by GSP Romania, a Romanian drilling company. The primary objective of the Ayazli-1 well is a Tertiary gas sand that tested 3.7 million cubic feet per day in the nearby Akcakoca-1 well drilled by TPAO in 1975. The secondary objective is a potential oil zone in a Mesozoic sand that was indicated on logs in the same well.

Toreador selected the Ayazli-1 location from among six distinct gas prospects identified to date in the region.

As operator of the project through its wholly owned subsidiary Madison Oil Turkey, Inc., Toreador estimates drilling costs will be about $4.5 million and potential reserves on the South Akcakoca prospect to be approximately 350 billion cubic feet (Bcf) based on available information. Per-prospect reserve potential in this frontier area ranges from 100 Bcf to 1 trillion cubic feet of gas.

Toreador is responsible for 75% of the Ayazli-1 well costs and retains a 36.75% working interest in the well. As previously announced, Stratic is funding 25% of the costs of the Ayazli-1 well to earn a 12.25% working interest in eight adjacent permits that comprise 962,000 acres. TPAO is being carried on the well for a 51% working interest and has an option to participate at this rate by funding its pro-rata share of costs related to future exploration, development drilling and subsequent production activities on the eight permits.

The drilling data and possible test results of the Ayazli-1 well will allow the partners to better evaluate the potential of other structures on the permits. The Ayazli-1 is the first well to be drilled in Turkish Black Sea waters in five years.