Pryme Executes First Step in Exploration Play

Pryme Oil and Gas Limited's first Raven Project well, the Spinks-Middlebrooks #11-1, reached planned total depth and was successfully logged.

Several intervals were identified on the electric log that correlate with the gas shows during the drilling phase and appear to aggregate a significant amount of total pay. As a result of the log analysis, the decision has been made to set a production casing string, which activity is underway at this time.

In addition, equipment purchase will commence of well stream separation facilities and a natural gas discharge pipeline to one of two alternative gas markets. This last phase should take approximately 45 - 60 days with the sale of first products planned for some time commencing in September.

Cotton Valley wells typically produce a combination of natural gas and condensate (this latter product is a premium-priced crude oil). The geographic extent of this Cotton Valley play is so vast and production characteristics so statistically booked, it is appropriate to complete this well and test it directly into the sales line.

This test reinforces Pryme's earlier decision to establish a joint venture relationship with Wave Exploration in order to focus on the development of Louisiana oil & gas resources.

Project Description

The Raven project covers mineral leases in the prolific Cotton Valley and Hosston natural gas trends in Lincoln Parish, Louisiana. Raven exists along a natural gas fairway of Cotton Valley marine bars, which are the target of the Raven project. The project has been classed as an "engineering play" to the extent that more emphasis is given to the drilling and completion techniques and production of the well, as generally most wells in the area will produce natural gas and condensate. Approximately ten drilling locations have been identified in the project with the leasing of acreage continuing. Prospective gas reserves to the 100% working interest within the Raven Prospect could be on the order of 50Bcf (20Bcf net to Pryme) according to Wave, based on 5Bcf per section. Pryme has a 40% working interest (30% Net Revenue Interest) ownership in the project.