Indago Petroleum Encounters Difficulty with Al Jariya-1

Indago Petroleum says that the Al Jariya-1 well, located on the Jebel Hafit prospect, which is expected to drill to a total depth (TD) of 5,900 meters, has reached a depth of 2,605 meters as at today's date. The well has proved to be technically very difficult. It was always designed as a high pressure, high temperature test, but in addition tectonic movements have produced 'stressed' rock formations which resulted in mechanical difficulties whilst drilling, provoking two sidetracks at approximately 2,000 meters. As reported in the Company's Preliminary Statement on 25 May this year, casing was therefore set at that depth – earlier than originally planned. As a further precaution, an 11-3/4" liner has also just been set in the section to 2,600 meters.

Although it had not been anticipated that such difficult drilling conditions would be encountered at these relatively shallow depths, the geological aspects of the well remain consistent with the pre-drill prognosis.

The rig operator is currently completing an overhaul and review of the rig in order to ensure that it is fully prepared for the significant challenges of the next section. Drilling is expected to recommence shortly, after which a forecast 91 days of drilling will be required to reach TD. Once operations at the Al Jariya-1 well have been concluded, the rig will move to the next well in the program: the Zad well on the Adam prospect in Block 47, provisionally scheduled to start in the fourth quarter of 2007.

Martin Groak, CEO, commenting on today's announcement said:

"Al Jariya has proven to be a very challenging well and the Operator is proceeding as efficiently and as cautiously as the conditions permit. Although the relatively slow progress has brought with it substantially increased costs, the prospectivity of Jebel Hafit is undiminished and Indago is funded to complete both this well and the rest of the planned work program."

Indago holds an approximate 50% interest in Block 31 located onshore Oman. The Operator, RAK Petroleum PCL, holds the balance of the interest.