Cardinal Resources Completes Testing at BC 3A Well in Ukraine

Cardinal Resources has completed the first stage of flow testing at Well No.3A on the Bilousivsko-Chornukhinska License in Ukraine.

The well flow tested at 4.05 million cubic feet of gas per day ("MMcfg/d") or 675 barrels of oil equivalent per day (BOEPD) from perforations between 3098 to 3103 meters in the V-20 reservoir and was flaired. The average wellhead flowing pressure of 88.4 atmospheres (1,300 psi) was obtained through a 9 mm (24/64 in.) choke.

The testing follows the deepening of the Well which commenced in June 2006, where two reservoirs ("V-18" and "V-20") were identified as being potentially capable of commercial production. While log analysis indicates the V-18 to be hydrocarbon bearing; no testing was conducted on the V-18 reservoir. The Company intends to produce gas from the V-20 first and leave any testing and completing V-18 until a later date.

The BC No. 3A Well is now shut-in while the test data is being analysed. The well will be completed at the V-20 interval and tied into the BC gas gathering and separation facility, with completion expected in the second quarter of 2007.

The BC No. 3A Well was drilled using a Ukrainian "hybridized" drilling rig, developed by Cardinal, which reduced the drilling time from a forecasted eight months to 76 days.

Commenting on today's news, Robert J. Bensh, Chairman and CEO of Cardinal said, "I am encouraged with the improvement in drilling time and the potential impact that has on our current drilling program. The completion of this well and the installation of the gas facility are important to keep Cardinal on track to meet our goal of 3,000 BOEPD of incremental production by the end of 2007.

The original BC No.3 Well was drilled in 1957 by a Ukrainian state entity. The re-drill of the new well, BC No. 3A, commenced in June 2006. In early August the Visean-17 (V-17) formation at 3,000 meters was reached. Cardinal's evaluation showed non-commercial indications of gas in the V-17. The well was then deepened to 3,300 meters and the evaluation of this lower interval showed the presence of three zones in the Visean section (V-18, V-20 and V-21) and based upon wireline log analysis, these three zones appeared to be hydrocarbon-bearing; with two of the zones potentially capable of commercial production.