MedOil: Early Louza Findings Promising

Speaking at that company's annual general meeting Thursday, MedOil PLC Chairman John Lander updated shareholders on the Tunisian 3D seismic survey and other exploration opportunities. His statement follows.

Louza, Tunisia

A 600 sq km 3D seismic survey covering the southern part of our Louza prospecting permit, offshore Tunisia, was acquired between August and October 2006. Processing of this large dataset is complete, and we are already at an advanced stage of interpretation. Initial findings have been very encouraging, and these are being used to provide focus and "fine tuning" for a final phase of processing which should be completed by the end of April 2007.

The initial 3D interpretation appears to confirm the overall structural configuration of the M'sela oil discovery, and it is anticipated that Oil-In-Place estimates for the accumulation will not be significantly affected. We intend, however, to use the final high-resolution 3D data volume to help elucidate the regional fracture patterns in the area, and by combining this with further evaluation of the M'sela-1 well data we hope to gain a better understanding of how this unusual reservoir might respond to production. This data will be critical in the design of any potential appraisal well.

Exploration prospects in the vicinity of M'sela have, however, already been significantly upgraded by the new seismic data. In particular, imaging of the M'sela West prospect has been improved and the feature now appears to be significantly larger than previously thought; potential recoverable reserves could be more than double the 50 MM bbl estimated by Merlin Energy Resources ("Merlin") on the basis of previous 2D data, making this a highly attractive exploration target. The nearby M'aila East and Ourata prospects also show increased potential as a result of the new data with prospectivity identified in more than one reservoir.

The Company has engaged Merlin to review the results of our interpretation of the new 3D seismic data and to provide an updated analysis of its hydrocarbon prospectivity. We plan to report on this to Shareholders when completed - possibly at the time of the Company's interim results in mid 2007. In the meantime we are actively seeking potential farm-in partners to participate in a drilling program planned to commence in 2008, subject to jack-up rig availability.

Other Exploration opportunities

Our application for two permits offshore Sicily (adjacent to the Vega oil field) received technical approval from the Ministry of Industry in December 2006, and the final award will be subject to acceptance of our environmental reports which were submitted to the Italian Government on 4 April 2007. We have commenced gathering technical data on these permits.

The existing 2D seismic data sets over the Joni 5 permit have been received from the Albanian authorities and the data quality is generally good to excellent. The data is now with Merlin for a detailed interpretation. An initial overview of the data has confirmed the existence of a number of potentially exciting geological play types as reported in our 2006 Report and Accounts. Final ratification of the Joni 5 permit is awaiting resolution of the precise co-ordinates of the maritime boundary with Greece.

The Company continues to look at new opportunities whilst focusing on progressing its strategy for the Louza prospects, which is key to the Group's future success.

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