Reserves Increased at West Medvezhye Gas Field After Feasibility Study

Victoria Oil & Gas says that DeGolyer & MacNaughton have issued an updated feasibility study on the Company's wholly-owned West Medvezhye gas and gas condensate project in Western Siberia, Russia. This study is a revision of that issued in December 2001.

D&M reports best estimate prospective recoverable gas resource volume of 5.5 trillion cubic feet for the entire West Medvezhye license area. Also identified are prospective recoverable liquid hydrocarbon resource volumes of 146 million barrels of gas condensate and 25 million barrels of oil. The total combined prospective recoverable hydrocarbon resource volume estimate for West Medvezhye is 1.1 billion barrels of oil equivalent. These estimated prospective recoverable resources are dependent on successful discovery and development of the prospects evaluated.

Victoria is currently undertaking well testing at its discovery well, Well 104 and drilling operations at two new wells, 106 and 103. Test results for Well 104 are anticipated in the first quarter of this year. Mobilization of drilling equipment is being completed at appraisal Well 106 and exploration Well 103 with drilling to commence next month at both locations. Test results for these two wells are expected during the second quarter 2006.

Commenting on the feasibility study today, Executive Director William Kelleher said, 'This is truly exciting news. D&M's conclusions independently confirm a significant prospective recoverable resource volume of 5.5 trillion cubic feet of gas and 170 million barrels of recoverable liquids for the entire West Medvezhye license, including the Well 104 discovery (referred to as the Danniella accumulation). We are on target to obtain the well test results from discovery Well 104 in Q1 and Wells 106 and Well 103 in Q2 2006.'

* A method of equating oil, gas and natural gas liquids. Gas is converted to oil based on its relative energy content at the rate of six thousand cubic feet of gas to one barrel of oil.