Zauralneftegaz Bids for Additional E&P Licenses in West Siberia

Siberian Energy Group, a U.S.-based oil and gas exploration company, will bid for five new 25-year exploration and production licenses in West Siberia through OOO Zauralneftegaz (ZNG), its 50/50 Joint Venture with Baltic Petroleum (E&P) Ltd.

The first three auctions are scheduled for May 31, 2006 (Yuzhno-Voskresensky and Petuhovsky), and June 14, 2006 (Lebyazhevsky block). The auctions for the remaining two licenses are expected in the fourth quarter of 2006.

ZNG currently owns four exploration licenses comprising 644,000 acres in the Kurgan Region of West Siberia. With the addition of the five new licenses, ZNG's total holdings would total one million acres.

David Zaikin, president and CEO of Siberian Energy, said: "We are excited about the prospect of securing the five additional licenses. We chose these particular parcels for a number of reasons: they have rock formations that present a large oil-generating potential, they are situated in close vicinity to ZNG's existing licenses, they have a well-developed infrastructure, and extensive data already exist for the licensed areas."

If ZNG obtains the five licenses, the Company will have access to the results of previously conducted seismic surveys through the Geological Fund of the Ministry of Natural Resources of the Russian Federation.

A scientific and technical analysis on the currently licensed areas is being performed by a team of geologists from Exploration Consultants Limited, one of the leading international oil and gas consulting firms, as well as interpretation specialists from Geodata Consulting. The analysis is expected to be complete by the end of May 2006.

Siberian Energy is one of the few U.S.-based public oil and gas exploration companies with 100% of its assets located in West Siberia, Russia.

The Company evaluates investment and acquisition opportunities in Russia and Eastern Europe with the goal of bringing a portfolio of natural resource licenses and operating companies to Western investors. Siberian Energy strives to provide an attractive ROI to shareholders by pursuing high-yield investment projects, reducing costs, and adhering to strict principles of transparency, disclosure and environmental consciousness.