Drilling Update on Bengara-II Block

The Seberaba-1 was originally planned to reach a total depth of 4,000 meters (13,120 feet). Drilling of the Seberaba-1 terminated at a depth of 2,914 meters (9,558 feet) in the third of three sidetracks made from the original wellbore. Testing activity of the Seberaba-1 has been suspended. Approximately 150 barrels of crude oil has been recovered by swabbing. Flow test and pressure build up tests to date have proved inconclusive due to apparent formation damage. Any future re-entry would be conducted with a different drilling mud and testing fluid program to avoid damage to the target reservoir intervals.

Drilling activity on the Seberaba-3 well is continuing. Currently an attempt is being made to sidetrack the Seberaba-3 after stuck drill pipe resulted in an 800-meter (2,624 foot) long fish being lost in the original hole before logs could be obtained. The Seberaba-3 is planned to a total depth of 2,800 meters (9,184 feet) to test possible reservoir zones below 2,400 meters (7,872 feet).

Drilling activity on the Seberaba-4 has been terminated. Seberaba-4 failed to encounter an expected reservoir sand anticipated at 2,450 meters (8,036 feet) probably because the wellbore penetrated a normal fault and the expected reservoir interval was faulted out. The Seberaba-4 wellbore has been suspended and preserved for possible re-entry.

Drilling of the Punga-1 well continues below 1,700 meters (5,576 feet) to a planned total depth of 2,800 meters (9,184 feet). No objective formations have been encountered yet.

Despite the inconclusive results of the Seberaba wells, the Company remains positive that the Seberaba prospect can be properly drilled and evaluated for future commerciality.