Canoro Awarded New Exploration Block in NE India

Canoro Resources has been awarded the AA-ONN-2003/2 onshore exploration block. This block in Arunachal Pradesh, northeast India, was awarded to Canoro (30%) and its consortium partners (National Thermal Power Corporation (NTPC) - 40% and Geopetrol International Inc. (Geopetrol) - 30% and Operator). This was the only block Canoro bid on under India's fifth round of New Exploration Licensing Policy (NELP V). The 295 km2 block is 2.5 km from the producing Kharsang oil field, which Geopetrol jointly operates, and approximately 150 km northeast of Canoro's exploration and development blocks in Assam. No wells have been drilled on the block and there is limited seismic coverage over the area.

The block has an initial seven-year exploratory period, broken into three phases, followed by a 20-year production term for any commercial discoveries. There is a possibility for a five year extension. The first exploratory phase includes a minimum work commitment of 200 km of 2-D seismic acquisition, 100 km2 of 3-D seismic acquisition and seven exploration wells of varying depths between 2,000 and 4,000 meters over the next three years. Phases two and three, each two years in duration, have additional seismic and drilling commitments.

Geopetrol, (the Operator), is one of the very first participants in the developed field offerings in India and has been jointly operating the Kharsang field since 1995. Geopetrol is a subsidiary of the French Geofinance Group who has a presence in over 80 countries worldwide (Geoservices Inc. is its flagship company and a leader in oilfield technology). It is understood that this is the only consortium in India to have two foreign oil companies working in the same block.

NTPC, is India's largest power utilities company and part of the 9 jewels ('Nav Ratna') Government of India owned companies. As part of its diversification plans, NTPC has entered into the upstream oil and gas business with this block. NTPC is known widely for its strong corporate governance and financial strength.

The award of this block is the latest step in Canoro's strategy to grow its presence in India.