West Medvezhye Gas Discovery Confirmed

Victoria Oil & Gas reports that resources of half a trillion cubic feet of recoverable gas have been confirmed by independent specialists D&M from discovery Well 104 at the Company's West Medvezhye gas and condensate project.

The project is located in the Yamal Nenetsk Region of Russia, a region which contributes around 20% of global gas production annually.

D&M is an international oil and gas reservoir auditor and the chief reserve auditor for many major Russian producers including Gazprom and Novatek. Using data obtained just from Well 104 at West Medvezhye a resource range has been established by D&M that estimates a maximum amount of 2.3 trillion cubic feet of recoverable gas resources present. This is over 130 times the previous maximum estimate released by D&M in August 2005 of 16.6 billion cubic feet.

Recoverable Resources

The D&M volume range of recoverable resources below is based on an independent interpretation of the data gathered from Well 104 in August 2005 that recorded two productive gas intervals at depths of 610 and 1,100 meters:

Low Expected High
Recoverable Gas 92.3 Bcf 500.8 Bcf 2.3 Tcf
Attributable Recoverable Gas Resources
per share
0.8 Mcf 4.6 Mcf 20.7 Mcf

Commenting on the results, Executive Director William Kelleher said; "Today Victoria has had a recoverable gas resource of half a trillion cubic feet independently confirmed at our premier asset, located in Russia. This resource potential is based on just one discovery well. In 2006 Victoria will proceed with the drilling of three additional wells at West Medvezhye. Successful tests of these wells will enable us to reclassify current resource volumes into reserves and to explore further the resource potential of this significant project in one of the world's premier regions for gas and gas condensate production".

Kevin Foo, Chairman, said, "Half a Tcf from our first well and more to come. This discovery could underpin our transformation into a mid-cap company."

Reclassification of the above mentioned resources into reserves is conditional on a successful well test of the existing Well 104 and the drilling, completion and successful testing of additional wells.