Eureka Reports Spudding of Bismil Well

Eureka Energy Ltd. announced that the Koyunlu-1 exploration well, located onshore South Eastern Turkey commenced drilling on 11 November 2006 and at midnight Turkey time on 12 November, was drilling ahead at 439 feet (133.8 meters).

The well is located in the major oil producing region of Turkey approximately 17 kilometers south of the West Raman oil field (original oil in place 1.5 billion barrels). Eureka recently acquired farm-in rights to earn a 20% interest and an option to increase its interest to 45% in two exploration Licenses, together known as the Bismil Prospect.

Koyunlu-1, with a proposed total depth of 1,380 meters, will test the eastern portion of a structure with similarities to the Raman field structures. The target reservoirs are Cretaceous age carbonates of the Mardin Group (1,280 meters), the same reservoirs which host oil in the Raman fields and numerous other oil fields in the region. The Operator expects to reach target depth within 2 weeks.

The structure has the potential to host recoverable reserves of 31 million barrels (P50) or 204 million barrels (P90), if oil is present and commercially extractable.

Background to the Bismil Prospect

The two licenses cover an area of approximately 500 square kilometers. The first of two farm-in wells, Koyunlu-1, is located about 17 kilometers south of the West Raman oil field (original oil in place 1.5 billion barrels) and about 40 kilometers south of the Selmo oil field (original oil in place 500 million barrels).

The Koyunlu-1 target is located in a regionally well established oil system and good oil shows were obtained in the nearest well, which was out of closure some 8 kilometers to the north east. Oil generation, migration and reservoir risk is considered to be low. Although the Koyunlu-1 well is up-dip from the West Raman field, structural integrity is the largest risk due to the wider than optimum seismic grid.

The oil recovered from the Raman fields is relatively heavy (13-18 API gravity) and any oil at Koyunlu-1 is likely to be similar. This oil is readily saleable at a small discount to standard Middle Eastern Crude prices.

The area has good oil and gas infrastructure with the regional oil refining and handling center at Batman, 24 kilometers north of the well location.