Calvalley Spuds Hiswah-5 Appraisal Well in Yemen

Calvalley Petroleum, perator of Block 9 in the Republic of Yemen, reports drilling operations at the Hiswah-5 appraisal well have started. The surface location of Hiswah-5 is approximately 700 metres NW of the Hiswah-4 well. The horizontal leg of the Hiswah-5 well will be drilled to the NE in the opposite direction of Hiswah-4, in order to test the NE flank of the Hiswah field.

The Company is also pleased to report that the Government of Yemen has approved the location and well programs for Hiswah-6 and Hiswah-7 which will be drilled and tested subsequent to completing Hiswah-5 in order to further appraise the Hiswah discovery, and approved the acquisition of 63 square km of 3D Seismic data and up to 200 km of 2D seismic data. The tenders to bid for the 3D seismic survey have been sent to bidders and we expect to award the contract by the end of April with seismic acquisition to commence shortly thereafter. The 3D seismic program will help to delineate the reservoir geometry of the Hiswah Field more accurately than the current 2D seismic data and will be used to identify development well locations for drilling late in 4Q 2005 and 2006.