Calvalley Begins Yemen Drilling Program Later This Month

Calvalley Petroleum has received approval from the Ministry of Oil in the Republic of Yemen for the awarding of the drilling contract and related services for the first of four wells on Malik Block 9.

Calvalley expects to commence drilling no later than May 31, 2002, and has received an irrevocable bank guarantee for US $150,000 from the drilling company, guaranteeing that the spud date of the first well will be on or before May 31, 2002.

In January 2002 Calvalley received US $10 million in funding to cover 100% of the cost of operations in the Block related to the completion of a four well drilling program which will satisfy the company's drilling commitments under both the first and second exploration phases of its Production Sharing Agreement with the Republic of Yemen. Under the terms of the funding commitment Calvalley remains the operator of Block 9 and retains a 60% majority interest.