Mediterranean Oil & Gas Gets Okay to Drill the MG2 Exploration Well

Mediterranean Oil & Gas

Mediterranean Oil & Gas says that the joint venture holding the Serra San Bernardo exploration permit has approved the drilling of Monte Grosso 2 exploration well (MG2).

The MG2 well is located immediately north of the Monte Alpi Oil Field, one of the largest oilfields in continental Europe, and the Tempa Rossa Field which has recently been cleared for development by Total.

Serra San Bernardo exploration permit – Monte Grosso prospect

The Company's wholly owned subsidiary, Intergas Piu' ("IGP"), currently owns 20% of the Serra San Bernardo exploration permit and is the Operator on behalf of its joint venture partners, which include ENI and Total, both of whom have agreed to participate in the MG2 well.

The Serra San Bernardo exploration permit contains the Monte Grosso prospect, which is located on a similar trend to the Italian Southern Apennines major producing oil fields Monte Alpi, which is ENI operated and produces approximately 95,000 bbls/d and Tempa Rossa, which is currently under development by Total.

The Company has completed a comprehensive geological and geophysical re-interpretation of the area of the Monte Grosso prospect. The Company has updated its resources study including a review of the volumetric estimates of the prospective resources and oil in place in the Mesozoic oil bearing carbonate reservoirs and revised the estimated resources in the prospect using a MonteCarlo statistical approach. The revised estimates are:

Best Estimate oil initially in place ("STOIIP") is now 1,250 MMstb (100% basis)

Best Estimate Prospective Resources has been increased to 280 MMstb (100% basis).

The Company is in advanced negotiations with ENI for a service agreement which will include the use of one of ENI's rigs to drill the prospect. Drilling on the MG2 well is expected to begin in the third quarter of 2007, with the objective of reaching a predicted total depth of 6,900 meters.

Environmental impact studies for the drilling approvals and the upgrade of the staging area of MG2 are already underway. The Company's CEO, Giovanni Catalano, said: "We are delighted with the recent technical advancement of the Monte Grosso prospect. "Our partners ENI and Total, have vast experience within this prolific oil region. With ENI we have carried out a detailed review of the hydrocarbon potential and risks within the prospect and proved up substantial prospective oil resources on the Monte Grosso prospect. Total's recent announcement that it has been cleared by the regional authority, Regione Basilicata to develop the Tempa Rossa Oilfield combined with the steady increase of oil production from ENI's Monte Alpi Oilfield create an attractive environment to quickly bring any discovery in Monte Grosso to commercial production."