DNO Provides Yemen Block 32 Update


Tasour #22 ST

The Tasour #22 ST development well was drilled to a total depth of 1,853 meters and completed as a producing Qishn oil well. The well encountered oil bearing upper Qishn sands in a crestal position on the eastern edge of the Tasour field. The well was completed and placed on production as a Qishn S-1A oil producer with an initial gross production rate of 6,440 barrels per day of oil, and 2,766 barrels per day of water. 2,511 barrels per day of oil is net, pre tax, to DNO, as share of working interest. Tasour #22 ST was side tracked to its current position after a Sarr/Qishn test in the first well track. The test in Qishn in the first track proved that the main south eastern flank is being effectively drained by the existing production wells in the area.

Godah Update:

The drilling rig is to be moved to a location at Godah #3, approximately 14 kilometers east of Tasour, to appraise/develop the Godah oil pool, discovered in January 2006. The 2006 drilling program has been expanded to drill Godah #4 following the Godah #3 well.

In early June, the partnership approved the development of the Godah field. The operator is currently installing equipment to commence production in the fourth quarter of 2006 at initial gross rates of 2,000 to 4,000 Bopd. The partnership also approved the construction of the permanent facilities required to develop the Godah field. The development consists of a 23 km 10 inch pipeline to the Tasour CPF and expansion of the Tasour CPF to process the Godah oil. The pipeline and expanded Tasour facilities could be operational by mid 2007.

Tasour #23:

A second, larger drilling rig is currently moving to Block 32 to drill an exploration well at Tasour #23. Tasour #23 is targeting a fractured basement prospect south of the Tasour field and is expected to take 50 to 60 days to drill and evaluate.

Seismic activities:

The approved plan to acquire a 275 square kilometer 3-D seismic program in 2007 has been accelerated. It is expected that the 3-D acquisition will commence in September of 2006. The 3-D seismic program will cover the Godah discovery and connected area to the eastern boundary of Block 32 and also cover a prospective area northwest of Tasour. The new 3-D seismic should assist in the development of the Godah field and in further exploration drilling planned for Block 32.

DNO is the Operator holding a 38.95 % Working Interest in Block 32, Yemen.