Victoria Begins Mobilization for West Medvezhye Project

Victoria Oil & Gas Plc

Victoria Oil & Gas Plc, which is focused on the Former Soviet Union, on Monday announced the commencement of mobilization for drilling of its new exploration well, Well 105, at its West Medvezhye gas and condensate project in Russia.

Well 105 will explore a 15 square kilometer prospect, for which independent reserve auditors DeGolyer & MacNaughton (D&M) have calculated a total gross prospective resource volume of 130 million barrels of oil equivalent. D&M have assigned to this location the highest potential success factor of those assessed in their report on the Project dated 30 June 2006.

The prospect is a "4-way closure" with subsurface data and 2D seismic suggesting that this location covers both structural and stratigraphic accumulations.

The principal target horizons are sandstone reservoirs at depth intervals between 2,760 and 3,780 meters. Total planned depth for the well is approximately 3,850 meters.

The company has begun construction of an ice road from the site of its current operations at Well 103 to Well 105, approximately 22 kilometers to the northwest. Once the road is finished, the drilling rig will be moved from Well 103 to the new site at 105.

All necessary equipment is expected to have been mobilized and rigged by the end of the first quarter of 2007 and drilling is expected to commence in the second quarter.

Commenting today, Managing Director William Kelleher said:

"As identified by independent reserve auditors D&M, Well 105 is West Medvezhye's most promising prospect for the discovery of gas and condensate. Favorable weather conditions have allowed us to begin mobilization ahead of schedule and we aim to commence drilling operations in the second quarter of 2007. All exploration carries a degree of risk, but D&M has assigned each of the seven prospective horizons at this well site a significant probability of success. This gives us great confidence in our interpretation and geologic prognosis."