Victoria Oil & Gas Says Well 70 on its Kemerkol Project a Dry Hole

Victoria Oil & Gas has completed drilling of exploration Well 70 and has recommenced production from Well 20 at its wholly-owned Kemerkol oil project in the Atyrau Oblast of Kazakhstan.

Well 70 was drilled to a total depth of 763 metres to explore the south of the license block close to a major east-west trending fault, up-dip of the well location. The logging results indicated all potential reservoir sands in the Jurassic and in the deeper Triassic to be water bearing and not hydrocarbon productive.

The conversion of Well 45 into a water re-injection well has been completed and Well 20 has been brought back into economic production. Using a progressive cavity pump, this well is currently producing approximately 140 barrels per day of fluid, of which 25 barrels per day is oil. With the installation of a larger pump the Company reasonably believes that it can at least double oil production from this well.

Having reprocessed the 3D seismic results using the physical data gathered from the exploration and development drilling undertaken, the Company has re-confirmed that the next exploration drilling location, Well 66, will be in the eastern area of the license block at the top of an anticline structure.

Tony Porter, CEO of Victoria Oil & Gas, said today, "So far our exploration activities have centred on finding potentially hydrocarbon-bearing locations sealed by fault lines running through the block. Well 66 is a different play concept targeting an anticline rather than a fault and should be spudded in a matter of days."

Porter added, "The completion of operations at Well 45 and 20 is positive news and we will now look to maximise production from this location. Well 20 is producing at a limited rate at present, but with more efficient extraction through a larger pump on this well plus our existing test production at well 73, we should see a significant increase in oil yield".