Granby Completes Drilling in N. Sea, First Gas Delayed

Granby Oil and Gas plc provided an operations update for the Tristan NW gas development project in the UK Southern North Sea.

The 49/29b-11 well has now been drilled to a total depth of 11,514 feet (3,509 meters) Measured Depth, which includes a 778 feet (237 meter) horizontal section in the reservoir. The well encountered the Leman sandstone reservoir very close to the prognosed depth with good gas shows in the reservoir section as expected. The well has been logged with approximately 700 feet of reservoir sand. Well completion operations to install production tubulars and the subsea tree have now commenced.

Operations were delayed by bad weather and drilling equipment problems, but well completion activities are still expected to be completed before the planned arrival of the Diving Support Vessel in late February 2008 required for the flowline tie-in.

As a result of the delays, Granby expects to contribute a further £3.5 million, in addition to the £2.5 million already contributed, toward the project. Despite this additional sponsor support, the Board believes that the project economics have improved since project sanction as a consequence of rising gas prices. The net present value of Granby's 54% interest in the project following this contribution is currently estimated to be approximately £13.4 million.

First gas is now expected to be in April 2008 (previously March 2008) although progress will be dependent on the weather conditions for the remaining well work and diving operations.

"Granby has a strong balance sheet, and expects to end the current financial year on 31 March with approximately £11 million of uncommitted cash," said David Grassick, managing director of Granby. "Granby already has three further UKCS wells drilling in 2008, including the Monkwell appraisal well. The Board expects to maintain a high level of exploration and appraisal activity, and is actively looking for opportunities to grow thebusiness."