Consortium Spuds Another Well in Krishna-Godavari

GeoGlobal Resources Inc.

GeoGlobal Resources Inc. said Friday that the drilling of the KG#15 exploratory well in the Krishna Godavari Basin offshore India has commenced.

The KG#15 is the third exploratory well to be drilled from the KG#8 well platform using the Saipem Perro Negro 3 jack-up drilling rig. It is intended to further delineate the extent of the KG Structure. The KG#15 will be drilled directionally to an intended total vertical depth (TVD) of 5,500 meters, deviating approximately 750 meters SSE of the KG#8 well platform.

The KG#15 is the fifth well of the 14-well drilling program committed by the consortium of Gujarat State Petroleum Corp. (GSPC), Jubilant Energy Ltd., and GeoGlobal under the terms of the production sharing contract relating to the KG-OSN-2001/3 Block (KG Block) in the Krishna Godavari basin. The basin is located in the Bay of Bengal.

GeoGlobal further announced that GSPC, the operator of the KG Block, has successfully positioned a six-well slotted template on the ocean floor guided by the two conductors for the KG#8 and KG#17 wells. The KG#15 is being drilled through a third slot in the template.

The company also announced that it has entered into a memorandum of understanding (MOU) with GSPC relating to exploration block CB-ON/2 (Tarapur Block). Under a previous agreement, GSPC, which owns a 100% participating interest (PI) and is the operator of the Tarapur Block, assigned a 20% PI to GeoGlobal subject to Government of India (GOI) consent. GSPC and GeoGlobal are currently awaiting GOI consent to this assignment.

Under the terms of GeoGlobal’s previous agreement with GSPC, the company is to fund its 20% PI share of all past exploration costs incurred on the Tarapur Block and keep in force a financial and performance guarantee in an amount sufficient to secure its performance under the Tarapur PSC. To date, GeoGlobal’s share of costs incurred amounts to approximately US$2.5 million that has been expended on the drilling of six wells and a recently completed 500-square-kilometer 3D seismic acquisition. Under the terms of the previous agreement, in the event such consent is not obtained, the assignment would be terminated. Pursuant to the MOU, in the event that the GOI does not consent to the Tarapur assignment, GSPC is obligated to repay GeoGlobal all amounts paid by the company to GSPC with respect to the Tarapur Block. Also, the assignment would be automatically terminated. GSPC is to repay such amounts to GeoGlobal within 30 days of a written notice from the company.

Of the six wells drilled to date, the Tarapur #G well was drilled in January 2006 to a total depth of 1,650 meters on the eastern portion of the Tarapur Block. A gas/condensate reservoir was discovered in the Kalol formation with an estimated reservoir pressure and temperature of 3,300 psi and 225 degrees Fahrenheit. During testing, the well produced 2.5 MMSCFD of gas and 106 BBL/D of condensate at an approximate well head flowing pressure (WHFP) of 1,500 psi. It is the intention of GSPC to drill one additional well to delineate the extent of the Tarapur #G discovery before submission for a two well Appraisal Program to the GOI under the terms of the PSC.

Two previously drilled wells, the Tarapur #P and the Tarapur #1 wells were drilled to an approximate depth of 2,250 meters to the top of the Deccan trap and encountered oil in both the Kalol and Olpad formations. Both of these formations were tight and tested non-commercial flows of oil. Various stimulation techniques were assessed, and a Hydro Fracturing job was performed on the Kalol formation in the Tarapur #P well resulting in a test flow of 150 BBLS/day of oil at 300psi WHFP. A geological model is being prepared to establish production potential of both the Kalol and Olpad formations in these wells and evaluate further drilling opportunities in this block.

The remaining three wells, drilled on the western portion of the Mitrampura Anticline, were abandoned.

“The recently acquired 3-D seismic is being processed and interpreted with the intent to drill additional exploration wells on this highly prospective block concentrating around our discovery in the Tarapur #G well,” said Jean P. Roy, GeoGlobal’s president and CEO.

GeoGlobal Resources Inc., headquartered in Calgary, Alberta, Canada, is a U.S. publicly traded oil and gas company that, through its subsidiaries, is engaged primarily in the pursuit of petroleum and natural gas through exploration and development in India. Since inception, the company's efforts have been devoted to the pursuit of production sharing contracts with the Indian government. Currently, the company is focused on the development of high-potential exploration targets in the Krishna-Godavari, Cambay, and Deccan Syneclise basin areas.