First Calgary Petroleums Says MLE Field On Track

First Calgary Petroleums

FCP says it is in the final stages of commercialization discussions for the MLE Field and remains on track with its project timeline envisaging approval by the Algerian authorities of an Exploitation License Application in the second half of 2006, an engineering, procurement and construction contract in 2007 and first production in 2009.

Exploration and Appraisal Operations

Since the last operations update, released 31 July 2006, FCP has continued with its active exploration and appraisal program. The block reaches the end of its 5-year exploration phase at the end of this year, following which the part of the block without discoveries will be relinquished. The retained area will then move into an appraisal period.

Recent drilling activities have focused on exploring the block prior to relinquishment in order to maximize retention of the most attractive acreage. Consequently the 2006 program targets new, untested exploration areas as well as remote appraisal locations designed to define the limits of discoveries.

In the period from July 2006 the following well operations have been completed: GSM-1 (cased and tested); GSME-1 (cased); LES-4 (drilled and cased) and ZER-1 (drilled, cased and tested). Currently, FCP is drilling the following appraisal wells: MZLS-2; MZLN-2 and MZLN-3. The testing program has also started on LES-4.

Richard Anderson stated, "We have now finalized our operational plans for the rest of 2006, in the light of results from recent drilling which were the subject of technical meetings in Algiers, completed last week. In the north-west of the block, the ZER-1 well tested hydrocarbons at sufficient rates to support the drilling of a further well on the structure, ZER-2, located 4.3 km to the SW. The GSM-1 well also recovered hydrocarbons on testing, although the full significance of the test on the southern part of Block 405b will be better understood after the testing of GSME-1, scheduled to commence within the next month. The specific test details for ZER-1 and GSM-1 will be released upon approval from our partner SONATRACH."

"As a result of our drilling to date, a new core area for future appraisal and potential development is emerging in the central area of the block, west of MLE. We plan to drill two further wells in the area before the end of the year: LES-6 and LEC-2. By the end of the year all attractive exploration targets will have been drilled and we will have significantly advanced the appraisal of existing discoveries."

"Regarding the MLE Field, we continue in discussion on a number of important areas, which we hope to conclude soon."

Further appraisal work will be undertaken from the start of 2007, with the aim of securing the next stage of commercialization following MLE.