Siberian Energy Awarded Two Exploration Licenses in Khanty-Mansiysk

Siberian Energy has secured two 5-year exploration licenses in Khanty-Mansiysk region in West Siberia through Kondaneftegaz, LLC ("KNG"), a Russian limited liability company wholly owned by SEG .

Based in the heart of the major Russian oil-producing region in West Siberia, Khanty-Mansiysk, Kondaneftegaz, LLC was established in 2004 for the purpose of geological research and development of hydrocarbon deposits in the Khanty-Mansiysk area.

On October 22, 2007, Kondaneftegaz, LLC was awarded two oil & gas exploration licenses for Karabashsky-61 and Karabashsky-67 blocks located in the Khanty-Mansiysk Autonomous Region. The license plots cover 166,000 acres with estimated 167 million barrels of C3+D0 resources (in the Russian Federation classification of the hydrocarbon resources, potential resources are represented by category C3; and forecasted ones are represented by categories D1 and D2). In accordance with the Sketch map of oil and gas deposits of the West-Siberian province, under the editorship of I.I. Nesterov, 1997, the license areas lie in the territory of the Urals oil and gas bearing area with the density of 160-280 barrels per acre of prospective and forecast recoverable recourses.

These are the first two successfully obtained licenses of the ten, for which Kondaneftegaz, LLC has applied to date. New licenses notably increase existing Company's holdings in the West Siberia.

Commenting on the announcement, David Zaikin, CEO of SEG, said: "I view the attainment of these two new licenses as significant to the Company's overall strategy. In addition to their geological and geographical significance, they also contribute to SEG's existing holdings in West Siberia. Acquisition of new licenses continues our commitment to satisfying global energy needs. Our Board of Directors believes that extensive exploration activity will eventually lead to sustainable profitability and competitiveness."

Khanty-Mansiysk is one of the World's largest oil-producing regions and is the number one producing province in the Russian Federation. The total volume of oil and gas condensate produced by Khanty-Mansiysk companies in 2006 reached 2.0 billion barrels.