Tanganyika Continues Aggressive Exploration Program in Egypt

Tanganyika Oil Company says that in Egypt, it has continued its aggressive exploration, appraisal and development drilling program with the overall objectives of testing additional prospects in the West Gharib area, defining the aerial extent of the new Hoshia, West Hoshia and Fadl discoveries and simultaneously increasing production.

Since October, 2005, the Company has increased the number of oil producing wells in the Hana Field from 5 to 7, completed drilling Hoshia-3 and Fadl-2 as oil producers, abandoned West Yusr-1 as a dry hole, completed testing West Hosia-1 as an oil producer, completed drilling the West Hoshia-2, 3 and 4 shallow wells which are waiting completion of testing and completed re-entry of the old (1960) Rahmi-1 well as an oil producer. The company submitted applications to the government to obtain two Development Leases in the West Hoshia and Rahmi fields and is waiting for approval to commence production from both fields. The Company is currently evaluating the reserves in Egypt, including the new discoveries, under NI 51-101 guidelines for yearend reporting.

Monthly average gross field production grew from 2,500 barrels of oil per ("bopd") in October, 2005 to current levels of 3,300 bopd of which the Company's net share is 960 bopd.

At the Tishrine Field in Syria, promising results have been observed from stimulation methods conducted over the past three months. A total of 21 wells have been stimulated with matrix acid and acid fracturing treatments. The production increase per well on an average basis as of report time is 40 bopd, or a net addition of approximately 840 bopd field wide.

The most recent well stimulated, West Tishrine H30, is a horizontal lateral that never produced and was sitting idle. An acid fracturing treatment was performed and resulted in a stabilized net rate from the well of 200 bopd. This is a good indicator of significant further potential through stimulation and/or re-drilling of the existing 100+ wells currently idle, and the drilling of new infill producers. The stimulation jobs on existing well assets can be performed at a fraction of the cost of drilling new wells.

There are currently 96 oil wells on production of the 247 originally drilled at Tishrine. Field production is currently 6,373 bopd which is approximately the base crude production rate. Infrastructure constraints have limited production at Tishrine primarily due to winter weather. Low ambient temperatures have a negative impact on Tishrine oil viscosity, increasing infrastructure pressures restricting well production capacity.

For comparison purposes, the impact on production capacity at Tishrine as a result of low ambient temperatures during winter months has historically resulted in a net production drop or restriction of approximately 1,200 BOPD. However, production has been maintained this year at or near base levels through stimulation methods and other production optimization efforts.

The most immediate solution to counteract low ambient temperatures is surface heating. Since assuming operations at Tishrine the most significant restrictions have been identified, the equipment has been designed and is currently being constructed with commissioning planned for the end of January. In addition to heat capacity, custody transfer metering is being installed at Tishrine.

A letter of intent has been submitted to MB Drilling for the MB-22 rig to commence long-term operations in Tishrine. This drilling rig is capable of operations on the large inventory of idle wells available for re-entry and horizontal drilling, and drilling the multiple new infill locations already identified. The rig will be moved to the Tishrine - Sheikh Mansour contract area during January to commence drilling and sidetrack operations. An initial program inventory of 24 wells is being considered for workover/stimulation, or re-entry to drill sidetrack laterals.

Finally, technical analyses of existing wells suggests potential extensions of the East and West Tishrine fields, and potential for additional exploration potential between the two producing areas along the Tishrine anticline. The feasibility of accelerating the 3D seismic acquisition in the Tishrine - Sheikh Mansour area is currently being analyzed. The company is currently evaluating the reserve potential at Tishrine - Sheikh Mansour under NI 51-101 guidelines for year end reporting.

At the Oudeh Field in Syria, gross field production is currently 2,737 bopd of which the Company's net share is 1,235 bopd. There are currently 19 oil wells on production and 3 wells temporarily shut in for workover. A total of four wells were drilled during 2005, OD-139, OD-140, OD-141 and OD-142. A fifth well, OD-143 was near total depth at yearend and is currently being produced prior to stimulation.

Of the four wells completed during 2005, three required remedial work to isolate water production resulting from fractures penetrating the bottom seal of the reservoir. Having hydraulic communication to the prolific water bearing carbonate formation below the Shiranish may be helpful in maintaining reservoir pressure. However, avoiding fractures in the lower part of the Shiranish reservoir requires a change in the development drilling approach at Oudeh to avoid high water production which limits rates of the more viscous heavy oil. The focus on thermal (steam) enhanced oil recovery pilot testing remains unchanged. The 210 Km2 3D seismic program covering the entire Oudeh contract area has been completed and is currently being processed. Preliminary results indicate high quality, high resolution data which will be helpful in targeting high productivity areas of the field early in the development program. The current drilling rig, Crosco 501, is on contract for two additional wells OD-144 and OD-145. Core samples will be taken in OD-144 to assist with the steam injection pilot design and the development strategy of the lower Shiranish reservoir prone to fracturing.

The availability of drilling rigs capable of operations at Oudeh, at reasonable costs for long-term operations, is less certain. The Company is in discussions with one rig contractor that could provide long-term services with a new built rig starting in June-July. This would cause a one Quarter delay in our program after OD-145. The Company plan for 2006 originally called for a second drilling rig at Oudeh to be added in April-May. Efforts will continue to identify a second drilling rig for Oudeh able to commence operations over the summer.

Finally, the increased emphasis at Tishrine for drilling and re-entry horizontal drilling will help the company maintain the focus on exiting 2006 with a rate in Syria on the order of 10,000 barrels of oil per day of shareable production (production above base crude production rates). Any drilling delays at Oudeh will be used to integrate new 3D seismic and core data for steam pilot at Oudeh. Delivery of the critical equipment for the steam pilots at Oudeh and Tishrin-Sheikh Mansour, steam generators, is estimated at 4 months.

Tanganyika Oil is a Canadian oil and gas company with production and exploration assets in Egypt and Syria. Its shares are traded on the TSX Venture Exchange and Swedish Depository Receipts trade on the Nya Marknaden of the Stockholm Stock Exchange.