Arawak Hits Again in Kazakhstan

Arawak Energy makes another discovery following the exploration success at Besbolek. Discoveries were made in both its Besbolek and Akzhar fields drilled on the basis of 3D seismic interpretations completed earlier this year.

At Besbolek, well 60 was drilled in the south wing, in one of the down dip fault blocks. Open hole logs indicate that the well has encountered three oil-bearing horizons in the middle Jurassic interval.

The total net thickness of the oil-saturated interval is 46 meters. So far, only the lowest level, which has less productive reservoir characteristics, has been tested, with a small inflow of clean oil. However, a productive capacity of approximately 100 bopd is expected from the upper horizons, which will be tested shortly. This well confirms additional down dip oil reserves in the middle Jurassic in the new pool discovered earlier by the successful exploration well 50.

Also at Besbolek, well 62 was drilled in the west wing of the block and has encountered new oil accumulations in the lower and middle Jurassic sediments between two major faults in the down-dip block.

A test of the interval 330-334 meters gave an inflow of oil at a production rate of 40 bopd. The upper interval behind pipe at 275-291 meters has not yet been tested and is expected to increase capacity from the well to more than 100 bopd.

At Akzhar, well 81 was drilled in a previously untested area between the two wings of the original 3.8-square-kilometer block (which was later expanded to 72.5 square kilometers). Open hole logs reveal that the well has encountered two oil-bearing intervals in the Barremian and Aptian deposits. On production test, the first of the two horizons produced 100 bopd of clean oil with potential to produce at a higher rate. Further appraisal wells are planned in this play.

Also at Akzhar, a further exploration well, well 80, drilled in an untested fault wedge has encountered oil on logs but has yet to be completed.

The Company currently has four active drilling rigs in Kazakhstan with two rigs completing the Besbolek drilling program and two rigs active at Akzhar, where another five exploration wells will be drilled before year end.

Meanwhile a workover rig has just been mobilized and is commencing workovers of old wells at the Alimbai block acquired by the company in January 2006. Three new wells are planned for Alimbai before the end of 2007. Currently no reserves have been attributed to this block.

So far this year, Arawak has drilled 27 development, appraisal and exploration wells at Besbolek and Akzhar, 21 of which have commercial production capability. Current production from Kazakhstan is approximately 7,500 bopd.

The Company plans to continue Akzhar exploration with a further eight wells in the first quarter of 2008.