Calvalley Logs Oil Pay in Yemen at South Hiswah 1

Calvalley Petroleum

Calvalley Petroleum has made a new oil pool discovery south of the existing Hiswah field in Yemen. The exploration well, "South Hiswah 1" encountered 32 meters of oil bearing reservoir in the Saar-Naifa formation and was verified by an independent petrophysical analysis.

Since the Saar-Naifa reservoir is being developed at the nearby Hiswah field, the reservoir characteristics are well understood and a decision was made to cement the lower portion of the vertical exploration well and kick off and drill a horizontal well approximately 500 meters of open hole. Upon completion, the well will be tested and put on production to nearby Hiswah facility.

Additional seismic will be required to delineate and properly map the new reservoir. This well represents the first of a serious of exploration locations that will be drilled throughout the remainder of 2006 and into 2007 by the Block 9 Joint Venture.

Operational Update

  • The first crude lifting of approximately 500,000 barrels by Occidental petroleum was made in the month of August.
  • A local Calgary engineering firm has been retained to carry out the design and assist in procurement and construction of a 16 inch diameter pipeline from Block 9 to Block 18.
  • The construction of the Central Processing Facility is continuing.
  • The second drilling rig for which a long term contract has already been signed, is scheduled to start drilling on Block 9 by end of October 2006. Its focus will be exploration and appraisal drilling allowing the existing rig to focus on development of existing discoveries on the Block.