Baltic: More Testing Needed at Mok-1 Exploration Well

Baltic Oil Terminals provides an update on its Mok-1 exploration well, currently being drilled in the Kurgan region of Western Siberia, Russia.

Baltic can report that the Mokrousovsky-1 well is close to reaching its target depth of 2,500 meters. The well did encounter some initial problems as a result of difficult lithology at a number of intervals, which has slowed, significantly, the rate of drilling through these areas.

Following the detection of hydrocarbons at several horizons, the well has been successfully logged and cored in some potentially prospective areas. Based on the information so far obtained, early indications are that a hydrocarbon system may be in place in the Mokrousovsky area. As a result, Baltic's geological consultants RPS of the UK and BNG of Russia have both recommended that at least one primary and up to four secondary zones be further evaluated, to establish reservoir properties and, if possible, potential flow rates to establish the possibility of commercial production.

Baltic has commissioned an independent third party report from the Tyumen Institute based on the data available from the logs and from physical specimens recovered. The Task Force set up by the Institute has confirmed the need for testing, supporting the recommendations of RPS and BNG.

Baltic has also engaged Schlumberger to run a Modular Formation Dynamics Tester ("MDT") tool in accordance with a program established by RPS. The MDT testing is due to commence within 5 to 6 days and is expected to last approximately a week. Further information on MDT testing is set out below.

Upon completion of the data acquisition, the results will be analysed by RPS and BNG. When the results are known, a further update will be given.

Simon Escott, Chief Executive, commented:

"This is an encouraging development, although clearly there can be no certainty of the well's potential until further analysis and tests are completed. We will keep shareholders fully informed when the results of the testing are known."