Offshore International Group Announces Peruvian Discovery

The Offshore International Group's Peruvian subsidiary, Petro-Tech Peruana S.A. (PTP), has made a significant oil discovery on the southern edge of its Block Z2B offshore Peru. The San Pedro #1 well was drilled to a total depth of 6666' from a platform in 250' of water approximately 14 miles north of the export terminal at Bayovar. The well was completed open hole in a fractured Paleozoic reservoir. The well is currently producing at a rate of 1200 BOPD and 500 MCFD with no water on a 24/64 choke. The flowing tubing pressure is 900 PSI and the oil gravity is 35 degrees API. A 24 hour shut-in on the well resulted in a 1200 PSI tubing pressure. On a one hour test with no choke, the well produced at a rate of 3300 BOPD with a flowing tubing pressure of 300 PSI. The drilling rig used to drill the well, PEPESA 48, is remaining on the platform pending the drilling of additional wells.

The Block Z2B runs along the northern coast of Peru for approximately 100 miles. Cumulative production from the 4 major fields on the block is over 300 MMBO with current production averaging 11,000 BOPD and 64 MMCFD. All of the production to date has come from the northern half of the block. According to Paul Doyle, Executive Vice President with PTP in Houston, "Previous drilling on the southern half of Block Z2B found primarily gas and heavy oil. Finding light crude on the very southern edge of the block dramatically changes our outlook on exploration south of Z2B."

PTP has leases or options on over 10 million acres in 4 blocks along the coast of Peru south of Z2B. PTP plans to drill its first wildcat, the San Miguel prospect, on Block Z-6, immediately south of Z2B, in early 2006. This 7000' well will test a classic anticlinal structure with 25 square kilometers of closure located in 140' of water.
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