Sky Petroleum Says Further Evaluation is Needed at Mubarek H2 Well

Crescent Petroleum Company International Limited, the operator of the Mubarek Field offshore UAE, reports that the Mubarek H2 well was perforated over 6 zones totaling 129 feet, as two separate tests. The lowest zone was perforated over a 27 foot interval which proved to be water bearing and was sealed off. The second test comprised perforations over 5 zones totaling 102 feet. Testing of this second interval is continuing through the field production facilities.

The well continues to flow in an unstable manner with a high water cut making accurate measurements difficult due to surging of the well. However during periods when the well was flowing in a stable fashion, rates of 168 BOPD and 2259 BWPD were recorded. Further evaluation is underway to investigate methods of shutting off zones which are producing water and carrying out additional stimulation of the zones producing oil. This will include running production logging tools in the well. Depending on results, further acidizing of the well may be involved.

"We are pleased that we are generating revenues, however further evaluation is required on the H2 well in order to stabilize production," said Brent Kinney, chief executive officer of Sky Petroleum, Inc.

Assuming a production rate of 168 BOPD and the current Mubarek crude price of US$65 per barrel, the net forecast monthly revenue to Sky under the terms of the Participation Agreement, after deduction of royalties and operating costs, will be approximately USD $200,000 per month.

Crescent is one of the United Arab Emirates most established and successful integrated low-cost operators with over 30 years of extensive experience in the region. As operator of the Mubarek Field for over three decades, Crescent brings extensive knowledge of the subsurface conditions of the Mubarek Field. The first commercial oil was produced from the Mubarek Field in the mid 1970's and the field has been in continuous production since then.

Sky Petroleum is an oil and gas exploration company. Sky Petroleum's primary focus is to seek opportunities where discoveries can be appraised rapidly, and developments can be advanced either by accessing existing infrastructure, or by applying the extensive experience of established joint-venture partners. In addition, the company also plans some higher risk, higher reward exploration prospects.

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