Interra Reports Spudding of Myanmar Infill Well

Interra Resources Limited announced on 18 August 2006 that its jointly controlled entity, Goldpetrol Joint Operating Company Inc. ("Goldpetrol") had commenced drilling a shallow infill well, well number CGP-08, at its Chauk oil field in Myanmar.

As reported, CGP-08 was to be drilled as an inclined well with a maximum deviation of 25 degrees. This was necessary in order to intercept both of the primary objectives, the UL3000 and UL3700 sands, in the oil leg for each formation. Deviated wells inherently have a higher risk with respect to drilling operations than comparable vertical boreholes. CGP-08 encountered problems during the initial angle buildup. At various times during the drilling, the down-hole assembly and some drill pipes became stuck in the hole. Most of the bore hole drilling hardware was recovered (although some was not) and the well has been plugged and abandoned.

The decision was made to move the drilling rig to the third infill well location in this shallow infill well drilling program, CGP-05, instead of "skidding the rig" and attempting a second borehole at the CGP-08 location. This would allow time to evaluate the problems encountered in the original borehole and determine if a second attempt is warranted in the future.

CGP-05 will be drilled as a vertical well with the primary objective of testing and producing the UL3300 and U3700 sands along with several secondary targets. It will be drilled at the southern end of the northern fault block and will test the interpreted south flank of this block where there is a gap in drilling. If successful, the well would prove additional new reserves and create additional infill opportunities. This well was spudded on 14 December 2006 and is planned to a total depth of 3400 feet with completion in approximately 30 days. It will be drilled using Goldpetrol's Cooper LTO rig and operations are being conducted jointly by Goldpetrol's staff and Myanma Oil and Gas Enterprise's staff seconded to Goldpetrol. The Company estimates that the results of the infill drilling should be available in approximately 2 months' time. The Company will announce the results of the drilling operation as soon as they may be ascertained.

Interra Resources Limited is a Singapore-listed company specializing in the upstream petroleum business. Its core focus is petroleum production, field development and low-risk exploration. The company is positioning itself to be a leading regional producer of oil and gas.