Arawak Announces Latest Well Results in Azerbaijan

Arawak Energy's associate Gobustan Operating Company Ltd. has announced the results of the latest appraisal well, Duvanny 104, completed in October 2004. Following perforation of the 828.5 to 833.5 meters interval, previous positive indications on logs were confirmed through a series of flow tests, which GOCL believes mean that a stable gas flow of approximately 1.2 million cubic feet per day is sustainable. Liquid recovery was insignificant. Independent studies of the test results by Arawak indicate that a flow rate of at least this level will be achievable on production.

Together with the wells worked over in 2001, Duvanny 70 and 77, and the new wells drilled in 2003, Duvanny 101 and 103, total shut in production is now approximately 3.7 million cubic feet per day and is sufficient to justify the investment in gas processing facilities and tie-ins to allow gas deliveries to commence. GOCL is now studying the design work required, and it is anticipated that gas sales will start in the first half of 2005.

A further exploration well, Duvanny 102 is currently being drilled in the east part of the Duvanny field. The target depth is considerably deeper at 2,800 meters. Drilling continues on schedule, with results expected to be available by the middle of December 2004. Further wells are planned in the Kyanizadag and Duvanny fields, with spud dates early in 2005.

GOCL is the operating subsidiary for the development of the South West Gobustan fields covered under the Exploration, Development and Production Sharing Agreement with the State Oil Company of the Azerbaijan Republic, in which Commonwealth Gobustan Limited ("CGL") has an 80% interest, with the remaining 20% held by SOCAR Oil Affiliate. Arawak owns 37.17% of CGL and the balance is held by China National Petroleum Company ("CNPC") group companies.