Saga Oil Increases Acreage Around Rodnikovsky License

SAGA Oil ASA has increased the licensed acreage by 16 sq. km by obtaining additional license for new acreage on an area that is adjacent to the northern border of the existing Rodnikovsky license.

The new license is a natural prolongation of the existing verified resources on the East-Shaltinsky oilfield that extends beyond the northern border. The main resources on the new acreage are the extension of the largest Rodnikovsky production zone, the Tournaisian, which has had a production setting of 355-boe pr. day. Based on the 3D seismic interpretation at the northern borderline and the ongoing production from the well on the northern border, SAGA estimates that there is a minimum of 6.25 Mboe in place. The extractable P2 reserves are estimated to be around 1,5 Mboe based on the 24percent extraction factor used in last year’s SPE reserve estimate for the East Shaltinsky extractable reserve base.

SAGA has thereby increased the extractable reserves (P1and P2) by 5,1 Mboe during the first half of 2007. The 5.1 Mboe increase includes 3.6 Mboe as previously announced due to verification of new production zones.

SAGA has after this a new preliminary Extractable Reserve Base (P1 and P2) on both licenses of 39.1 Mboe before final interpretation of 3D seismic.

Malvin Hoeydal, President and CEO of SAGA Oil ASA comments: “Obtaining of the new licensed acreage adjacent to our northern border is strategically important for SAGA, as the new production reserves are natural extension of the existing East Shaltinsky reserves. The currently known largest reserves on the new license are mostly in the carbonate horizon, which will allow for easy and cheap well stimulation. This means that we can expect similar production profile as we have on the well on the border between the two licenses i.e. minimum of 355 boe pr. day on the main target wells. SAGA will commence with shooting full 3D seismic on the new license as soon as the formalities and capacity for this work are made available. The new 3D will then be used for creating the final reserves estimate, drilling and draining plan for the new acreage.”