China North East Reports Success From New Wells

China North East Petroleum Holdings Limited, an oil producing company in Northern China, announced successful onshore exploration results for three significant wells drilled in the company's Qian112 oil field. The wells further expand and delineate the existing areas of operation and production in the field.

On July 3, the drilling team of Rising Sun Oil Exploration and Production Ltd. successfully completed the drilling work of three new wells (Qian5-2, Qian3-5, and Qian12-16). The "Qian5-2," a 5,905-foot exploratory well, has encountered a 59-foot net pay horizon base on well log analysis. The well also confirmed additional pay stringer in a previously discovered upper reservoir.

Additionally, by analyzing the geologic drilling and well logs, the company’s engineers expect that the Qian5-2 well will be possibly producing 35-38 barrels of oil, which is on the same production output level to Qian12-14. The geological logging analysis of the other two wells (Qian3-5 and Qian12-16) will be available and updated soon.

In an ongoing effort, the company is planning to start the frac job on these three new wells in next 10 days. The fracturing team from Jilin Refinery will perform the task. Meanwhile, additional wells are planned to be drilled in Qian112 Field this year to further exploit the production potential of the field.

"These successes underscore our corporate exploration and production strategy of focusing on core, high-impact opportunities that support our base business," said Hongjun Wang, president of China North East. "We are very pleased with the work performance and well drilling result of our drilling team; Rising Sun truly continues their success in Songyuan Region and delivering their commitment to our company's well drilling program. Subsequent updates will be available regarding this ongoing drilling project."

China North East Petroleum Holdings Ltd. is engaged in the production of crude oil in Northern China. CNEH has a guaranteed arrangement with Jilin Refinery of PetroChina to sell its produced crude oil for use in the China marketplace. The company currently operates 21 producing wells in Northern China and estimates generating approximately an average 420 barrels of high-quality crude oil per day. By the end of 2007, CNEH plans to finish drilling another 81 wells, resulting in a total of 102 producing wells.