Petrosearch Says Damage Minimal to Projects in Storm's Path

Petrosearch Energy says its initial assessment of the effect of Hurricane Katrina on its two projects in the area of the storm, one in Tensas Parish, Louisiana and one just across the river, in Jefferson County, Mississippi.

"Although communication is still difficult in these areas, and we are awaiting detailed reports, it appears that the impact on our Mississippi property was minimal; the Louisiana property was inspected late yesterday. Access to the location has been cleared and the drilling contractor has been informed that the roads are open. We will experience operational delays until conditions return to normal," a company spokesman said.

Louisiana Property

Petrosearch is a 25 percent working-interest owner in the Harper Z-1, a developmental gas well on a 2,000 acre leasehold in the Rodney Island Field, located on the Mississippi River in Tensas Parish, Louisiana. The well was spudded August 24th and surface casing was set at 3202 feet. The objective zone is the Lower Tuscaloosa Massive Sand, with the target intercept under the river, requiring directional drilling to a total measured depth of about 12,000 feet. The Rodney Island Field was originally discovered by Tenneco in 1962.

On Sunday night (August 28th), in anticipation of the storm, the derrick was laid down and secured and the drill site evacuated. As the storm passed through the area, trees were felled by the wind, blocking the road to the location. As of Tuesday night (August 30th) the roads have been cleared, allowing drilling to resume when the rig crew returns and the derrick is raised. Most of the crew lives in areas affected by the storm, which may delay the start of operations while they tend to personal business or the contractor finds replacements.

Mississippi Property

The Company is in the process of completing its test of the Hosston Formation with the Phillips-Burkley #1 well, drilled to a total depth of 17,300 feet, in Jefferson County, near the Mississippi River. The well is an exploratory gas well on a leasehold position of 7,481 acres and is being funded by an institutional investor. Petrosearch is the operator and has an "after payout" reversionary interest ranging from 12.5 percent to 25 percent in each well in the leasehold funded by the institutional investor.

Petrosearch was awaiting additional equipment for completing the well when the storm moved over the location. The hurricane did not interrupt any ongoing work on the project. Work will resume when the location dries out and the equipment arrives on site.