Solana Resources Encounters Gas with Guariquies 2 Appraisal Well

Solana Resources announces the results of the Guariquies 2 well, drilled as an appraisal well to the Guariquies 1 discovery made in March 2006. The Guariquies 1 discovery tested oil at commercial rates from the Mugrosa Formation at approximately 5,000 ft.

Guariquies 2, drilled from the same surface location as Guariquies 1, was deviated 1,600 feet to the west of Guariquies 1 with the objective of penetrating a thicker gross sand section at a higher structural elevation than at the discovery well. Post drilling evaluation of Guariquies 2 confirms that the target Mugrosa reservoir section was encountered approximately 770 feet higher than at Guariquies 1 and that the gross section was more than 800 feet thicker than at the discovery.

Guariquies 2 has encountered predominantly gas in the two main sands penetrated in the well. The lower zone, from 5,953 to 5,982 feet, produced gas though a 36/64 inch choke at a stable rate of 0.70 million cubic feet per day. The upper zone, from 4,971 to 5,004 feet produced gas through a 36/64 inch choke at a stable rate of 0.74 million cubic feet per day and also produced 8 barrels of 24 degree API oil.

The Guariquies 2 well has been suspended and the drilling rig used to drill the Guariquies 1 and 2 wells has now been released. The Guariquies 1 well is expected to be put on long term test in approximately one month. Oil produced during the test is expected to be trucked to a receiving point located approximately 10 kilometers from the well location.

Activity continues to execute the previously proposed plan to continue to appraise the Guariquies discovery to the north with at least two more appraisal wells. The first of these, Guariquies 3, is expected to be located 4.6 kilometers to the north of the discovery. The environmental license for the Guariquies 3 location is in progress.

Solana participates directly in the Shared Risk Contract, with Ecopetrol and Ramshorn, and paid 37.5% of the costs and will receive 33.75% of the production of Guariquies 2 and all future Guariquies wells.