Matra to Begin Production Testing in Hungary

Matra Petroleum will begin production testing on Horvatkut and Marcali discoveries in 2008 for the Inke Concession in Hungary. Successful tests will lead to production in 2008, with two well exploration programs beginning at the end of Q1.

Production testing using a workover rig will begin in January on the Horvatkut-1 and Marcali-1 discoveries. Testing for each well is expected to take about 10 days.

Nearby gas transportation infrastructure can be accessed relatively easily. Successful testing should lead to gas sales in late 2008. Work is underway to convert certain areas of the Inke Concession into mining plots.

Processing of the 2007 3D seismic survey is almost complete, and a number of prospects exhibiting direct hydrocarbon indicators (DHI) have been identified. Further modeling will take place to prioritize the prospects for drilling. Local approvals are being sought to drill two exploration wells commencing at the end of the Q1 2008.

"The 2007 gas discoveries have proved our DHI techniques and the new seismic have uncovered new prospects of a similar type," said Matra Managing Director Peter Hind. "The focus of the 2008 program is to define our discovered reserve base and bring it on to production whilst evaluating the full extent of the exploration potential of the block.

"2008 should prove to be another interesting year in the development of the Inke Concession."