CanArgo Says Second Kazakhstan Well Encounters Gas

CanArgo Energy reports that the second exploration well of the Akkulka exploration program in Kazakhstan has been successfully tested as a second new gas discovery.

The AKK05 well tested dry gas at a stabilised rate of 100,000 cubic meters (3.53 million cubic feet) per day on a 24 mm (60/64 inch) choke with a flowing tubing head pressure of 13 atmospheres (191 psig) using 73mm (27/8 inch) tubing. The AKK05 accumulation is located some 6.5 kilometers (4 miles) north of the Kyzyloi Gas Field.

Last week CanArgo announced that the first exploration well to be tested, AKK04, flow tested at estabilised rates of up to 90,000 cubic meters (3.18 million cubic feet) of dry gas per day on a restricted choke discovering a new gas deposit located some 20 kilometers (12.5 miles) east of the Kyzyloi Field.

The third exploration well in the program, AKK03, is cased and awaits testing as part of a co-ordinated testing program involving both exploration wells on the Akkulka block and development wells on the Kyzyloi Gas Field, with two more exploration wells planned to be drilled before year-end. The cost of each well is approximately $500,000-$600,000 and they are being drilled on a turnkey basis.

These discoveries have established new shallow gas deposits within the Akkulka Exploration Contract Area which surrounds the Kyzyloi Gas Field, and further proves the geological/geophysical model for these exploration targets which are identified as amplitude anomalies on seismic data. It is the intention to tie in these new discoveries to the Kyzyloi development, where first gas is currently planned for the end of Q2 2006.

Chairman and CEO, Dr. David Robson, commented, "We are delighted by the success of this second exploration well in Kazakhstan and at the quick progress this program is making. These discoveries should significantly increase the potential of our shallow gas development project in Kazakhstan."

CanArgo is an independent oil and gas exploration and production company with its oil and gas operations currently located in the Republic of Georgia and in Kazakhstan.