Sibir Says Salym Drilling Results Above Expectations

Development of the Salym Fields infrastructure commenced in late 2003 and drilling activity at the West Salym Field began with the initial drilling rig in April 2004. A second rig is at work in Upper Salym and two additional rigs will be operational later in May 2005 in West Salym. In order to achieve the greatest efficiencies SPD is 'batch' drilling on the same drilling pad, with up to 20 wells being drilled from each pad. In West Salym alone 26 pads are currently planned.

Of the 6 wells completed in West Salym, SPD has tested 4 wells and early production is comfortably exceeding expectations with wells producing at an average rate in excess of the prognosed production of 80 m3/day (500 barrels) with less than 1% water content.

In total 19 wells have been drilled to date. Four are on production as described above and two are about to be brought on test. Ten await completion and three are in construction.

Commenting on these results Sibir Chief Executive Henry Cameron said "These early drilling results being above expectations are very encouraging and bode well for the future performance of the Salym Fields. This reservoir performance confirms the historic data upon which Sibir based its original decision to proceed with investment in the field. Given the extent of the reserve and potential for further exploration at Salym this is a very exciting result with much credit due to the excellent work of SPD's staff and contractors."