CDS Gets Okay to Begin Exploration on Paraguayan Block

CDS Oil & Gas Group plc said that its wholly owned subsidiary, CDS Energy S.A. (CDS-SA), a Paraguayan company, has received approval to move to the exploration phase on its Boqueron exploration concession through to November 2009.

CDS had applied in September 2006 to the Ministry of Public Works and Communications, for the transition from the Prospecting Period to the Exploration Period and approval of exploration licenses over 20 areas, each of 40,000 hectares, comprising a total of 800,000 hectares. This is the maximum allowed per concession by Paraguayan law. The Ministry approved this on 22 March 2007, and it is valid until 21 November 2009. The areas selected by CDS contain the primary targets it has identified on the Boqueron Concession. One of these targets is the Emilia well area where a Carboniferous oil target has been identified at 800 meters measured depth.

During the Exploration Period CDS will be expected to meet certain work obligations including the shooting of 250 kms of seismic with a minimum expenditure of US$750,000, and to drill three exploration wells with a total investment of not less than US$1,700,000. In addition to these work commitments, CDS is currently reprocessing with consultants in Denver, Colorado 930km of existing seismic data over the area. The results of an Aeromagnetic survey conducted over the 800,000ha Concession in November 2006 are also in the final stages of interpretation.

CDS is a UK company which, through its Paraguayan subsidiary, CDS Energy S.A., is pursuing the exploration and development potential of oil and gas on three blocks, including the Boqueron, in North West Paraguay in South America. These blocks include substantial oil and gas exploration potential in the prospective eastward extension into Paraguay of the productive Bolivian Chaco Basin.

The Company is actively pursuing farm-out participants and is in discussion with several companies which have expressed an interest in the potential of the properties.