Indago Petroleum Awarded Ras Al Khaimah Concession

Indago has entered into a new Petroleum Concession Agreement with the Government of Ras Al Khaimah, in addition to a Joint Operating Agreement with its partner in this venture, the Ras Al Khaimah Gas Commission, a Government company in the United Arab Emirates. The concession area encompasses an offshore oil and gas field called RAK B (also referred to as the "Baih" structure) which was discovered in 1976 by Vitol. The RAK B-1 well tested at rates of around 6 to 7MMscf/d of gas and 1800 to 2200 bbls/d of condensate from the "Thamama" reservoir and around 3000 bbls/d of oil from the "Ilam" reservoir. The tested reservoirs are located in the same formations present at Bukha and West Bukha, discovered fields that are operated by Indago.

Two later wells (B-2 in 1977 and B-3 in 1978) failed to find productive hydrocarbons, however they were all based on low resolution 2D seismic data. More recently a 3D seismic survey has been shot and is currently being processed by Indago. Initial interpretation shows considerable differences between the 2-D and 3-D surveys, which could prove significant. Indago would also expect to take advantage of the advances in drilling and completion techniques available since 1976. Furthermore, at the time of discovery there was no gas processing plant operating in Ras Al Khaimah, or offshore infrastructure at the Saleh field, which now should greatly assist in reducing the threshold for commercial reserves.

The Joint Venture (Indago as operator with 40% and Rakgas with 60%) plans to leverage off Indago's regional oil and gas experience and Rakgas' local infrastructure and gas processing/marketing skills to create an appraisal and development plan for RAK B. Indago's financial commitment associated with these agreements will be to fund our pro rata share of the work program, currently consisting of technical & commercial reviews and inspections.

An existing platform at B-1 will be the subject of an inspection. Over the next 12 to 18 months the Joint Venture will carry out the technical and commercial analysis necessary to determine whether further drilling and/or facilities installation is justified.

Indago expects to update the market on the RAK project during the next 18 months.

Peter Sadler, CEO of Indago Petroleum commented:
"This is potentially an excellent development opportunity for Indago. We are hopeful that the historically proven hydrocarbon area, can be investigated and transformed into a commercial find by the application of modern technology and up to date techniques such as 3-D seismic and directional or horizontal drilling.

We also believe our relationship with Rakgas will continue to be mutually beneficial, with Indago providing the technical E&P skills to the Joint Venture and Rakgas as an invaluable local processing, sales & marketing partner."