Pebercan Steps Up Exploration and Development in Cuba

Pebercan has intensified its oil exploration and development project within Bloc 7, a concession located between Havana and Matanzas on the north coast of the Republic of Cuba. At present, three drilling rigs are active in this zone and will remain active until the end of 2004.

DEVELOPMENT

The intensification of developments concerns the SEBORUCO field. The field's eastward extension was confirmed by the results of the 3D seismic campaign conducted in 2003. In view of the positive results following the drilling of the SEBORUCO 4 well which was put in production in March 2004, the SEBORUCO 7 well which was put in production in May 2004 and the SEBORUCO 5 well which was put in production in August 2004, the company is now drilling two new wells: SEBORUCO 10 and SEBORUCO 8.

These two wells have already reached the reservoir, and rigs have started drilling the drains in the pay zone. Final results will be released as soon as operations have ended and production tests are conducted.

Drilling rigs will then be deployed at once to drill wells SEBORUCO 15 and SEBORUCO 103.

The objective of SEBORUCO 15 will be to verify the field's eastern limit, approximately 1600 meters east of SEBORUCO 10.

SEBORUCO 103 is expected to substantiate two thrust sheets close to the coast; the top here had been barely penetrated by the SEBORUCO 3 well. In this instance, the well will be shorter and located under the trajectory of the current SEBORUCO 3.

EXPLORATION

The company has commenced exploratory drilling of the SANTA CRUZ 100 well, a prospect situated in the western section of Bloc 7. Pebercan is the operator of this section.

The drilling began on September 19, 2004 and has reached 2,500 meters. Operations are proceeding according to forecasts, using the NATIONAL 110, a drilling rig that belongs to the company. Should results prove positive, PEBERCAN will prepare an appraisal program for this new structure which will include drilling one or two additional wells.

The structure of SANTA CRUZ is comprised in the three prospects indicated by the results of the 3D seismic campaign. The two other structures will be the target of exploratory drilling by Pebercan during the first semester of 2005.

Pebercan Inc. is involved in the exploration, development and operation of oil reserves in the Republic of Cuba. Its mining domain includes five concessions covering 6,155 km2, including Block 7, the only concession operated to date. Pebercan sells all of its production to the Cuban government.