Aladdin Oil & Gas Production Goals Still Being Met

This operations update provides a summary of developments at Aladdin Oil & Gas Company since the last update was published on Dec. 14, 2007.

Aladdin made the transition towards the end of 2007 from being a pure exploration company to being an oil producing company. In order to strengthen this process, Aladdin shall concentrate the company's resources on its production segment during 2008.

Due to the volatile situation in the financial market towards the end of 2007, the board of directors decided to postpone listing on Oslo Axess until 2008. All preparations have been completed and the listing application for the stock exchange is ready, such that the listing process can be initiated quickly.

Beginning in 2008 the company will be conducting quarterly based reporting and hold quarterly presentations.

The un-audited accounting report for 2007 will be published on 27 March and the company's financial calendar for 2008 will be presented at the same time. The company additionally intends to prepare a monthly operations update, which will be published on the company's website.

The company is in communication with various parties concerning collaboration with regard to the development of existing and new licenses in Russia. Aladdin is experiencing considerable interest from major partners due to the company's experience from Timan Pechora and Orenburg, and owing to a solid network in Russia.

Aladdin has so far executed a basic overhauling of 5 of the 7 potential wells on the Bogdanovskoaye license in Orenburg. This is pursuant to the planned work program. The daily production rates for the three wells that were put into production are from 15 to 50 barrels per well, which are lower than the test indications.

Aladdin's subsidiary in Orenburg, Orneftegaz, has initiated discussions with Petroalliance, a Schlumberger company in Russia, concerning the stimulation efforts. The companies are currently involved in negotiations and a contract is expected to be signed during the first quarter of this year. The Schlumberger company has extensive experience with stimulation measures in the Orenburg area.

Aladdin maintains its production goal of 700 to 1,000 barrels from existing wells.

The company has developed a drilling and development program (i.e., Field Development Plan) on its Orenburg license, which includes 18 new wells and 3 sidetracks based on the results of the 3D study on the northern part of the license. The project work and permits are ready. The drilling start of the first exploratory well is expected to take place in late summer of 2008. The company plans to drill 2 new wells on the license in Orenburg during the course of this year. New wells are expected to produce 250 to 350 barrels per well following stimulation.

3D seismic over the rest of the Bogdanovskaya license has been acquired. The data has been submitted for processing and interpretation and the results are expected during the first quarter. The company anticipates that new and interesting structures will be revealed. There is particular interest related to structures that can overlap available adjacent licenses. If this can be established, the company intends to apply for the right to explore such areas.

Gaffney, Cline & Associates (GCA) has completed its reserves report for the Bogdanovskaya license and has concluded that the following reserves estimates pertain to this license: 2P – 13.5 million barrels; 3P - 24 million barrels.

The A60/80 rig will complete the drilling of gas well 1B before being moved towards two oil prospects; 7A and 11A. These oil prospects must be drilled during the winter. Wells 1C and 1D on the gas prospect are scheduled to be drilled afterwards.

All testing of shallow wells will be executed using a crane during the winter. This is intended to free up the URB rig and achieve the most efficient possible utilisation of drilling time for the URB rig. The winter drilling program for the URB rig is as follows: 4A west on the MS license; 5A south for 4a on the MS license; re-testing of 2B.

The URB rig is in transit to 4A and spudding is expected to take place within a matter of days. All of these locations are primarily accessible during the winter. Core samples have been taken on the 4A and 5A structures showing oil-saturated sandstone.