Kroes Completes First Well in Central Alberta Prospect

Kroes Energy Inc.

Kroes Energy Inc. said that the first prospect in its central Alberta joint venture has resulted in a shallow gas completion.

A shut-in well was re-entered and fractured in two zones. On short tests after clean-up, the well produced 600 mcf/day from the two zones. A 100-meter tie-in to the existing area's gathering system is under construction. Kroes has a 25% working interest in this prospect, and its net share of production at these rates is 150 mcf/day or 25 barrels of oil equivalent per day.

Kroes also participated in the drilling of a second well in the same region, where it has a 12.5% working interest. The technical data from this well are now being evaluated to determine whether it is capable of production. By participating in this well, Kroes earned the right to participate in a prospect on an adjoining section that it is now evaluating.

Kroes has also paid certain seismic fees to participate in a well with a 25% working interest. Drilling is expected to take place in September.

"We are pleased that this program is now underway with encouraging initial results,” said Fred Callaway, Kroes’ president. “We expect to participate in a number of similar prospects over the remainder of 2006 and we look forward to announcing those results as they become available."

Kroes Energy is a junior oil and gas producer and explorer participating in the Lelyaki Oilfield redevelopment project in Ukraine, one of Eastern Europe's fastest-growing economies. It also has a joint venture agreement in central Alberta.