GeoGlobal Announces KG#1 Results

GeoGlobal Resources reports that drilling, logging and testing operations have been completed on the KG#1 well located within the Krishna Godavari Basin on the Exploration Block KG-OSN-2001/3 ("KG Block") off the east coast of India. The Gujarat State Petroleum Corporation ("GSPC") is the operator of the KG Block. This well was the first of an initial 4 well exploration drilling program using Saipem's Perro Negro 3 on the KG Block. This was also the first well of a 14 well drilling commitment to be completed over the next 16 months under the terms of the Production Sharing Contract relating to the KG Block. GeoGlobal has a 5% net carried interest in the wells drilled on the KG Block.

The KG#1 well was drilled to a depth of 2,620 meters over a period of 90 days. The logging and testing program was conducted over an additional 14 days. Due to deteriorating hole conditions caused by a number of drilling difficulties, the programmed total depth of 3,300 meters could not be reached. GSPC elected to run casing to 2,220 meters in order to overcome adverse drilling conditions, but with limited success. An open hole logging program from 2,220 to 2,620 meters was then successfully completed.

Based upon a complete suite of modern well logs showing highly fractured porosity and increased mud gas shows during drilling, GSPC elected to test this interval. Since this prospective interval could not be cased, a 400 meter open hole barefoot test was conducted to confirm the presence of hydrocarbons in this interval. Inability in this 400 meter open hole to isolate the water within this highly fractured reservoir resulted in preferential coning of water with 84% methane and 16% light gases and condensate. The result was an unsuccessful production test. This section was abandoned until further delineation wells are able to be programmed on the KG#1 structure.

Based on log analyses, GSPC ran 3 additional DST tests between 1850 to 2182 meters which indicated high formation damage of the potentially productive gas zones, but no water. GSPC has elected to abandon the KG#1 well and move to the next location.

Jean P. Roy, President and CEO of GeoGlobal stated: "We are disappointed that we were unable to successfully complete a test of our main target reservoir. Our uphole secondary targets were also badly damaged with the heavy mud weight that was used during the lengthy time it took to drill our main target."

Mr. Roy further stated: "GSPC and GeoGlobal have learned a lot from our first exploration well which will prove invaluable when we return to drill our next well into this structure. Information gained by the drilling of the KG#1 structure is being incorporated into the 3D seismic data to delineate the hydrocarbon indicators across the KG#1 structure and further extrapolate this data across the entire KG Block."