Aurado Logs Pay on Liman Block in Khazakstan

Aurado Exploration says that it has logged pay with its first well drilled on the Liman Block in western Kazakhstan. The well, designated East Tegen-1, was drilled to a total depth of 564.8 meters and reached the Kungarian Salt as predicted. The well is testing 100% oil at rates in excess of 600 barrels per day (bopd) from a 4.5-meter zone between 369.5 and 374 meters. The testing, which is being conducted by Baker Atlas will continue for several more days to test the flow rates and pressures at different choke sizes.

The initial target of the well was in the Albian sandstone predicted between 200 and 300 meters, but this proved to be tight and water bearing. Hydrocarbons were encountered, however, at depths of 368 and 422 meters in the Aptian sandstone. Logging of the well was carried out, and the well was cased for further testing and suspended in January.

Using a work-over rig, testing of East Tegen-1 commenced on March 14, 2003, and the potential 4.5-meter pay zone was perforated. After swabbing and further clean-up, the well flowed at rates in excess of 600 bopd. These unexpected high flow rates resulted in the well being shut-in after a limited testing period until additional storage tanks could be obtained for the volumes of oil produced. In view of the shallow depths of the reservoir it is expected that the well will produce at a stabilized rate of at least 200 bopd. East Tegen-1 is expected to be economically attractive because of the shallow depths, reasonable drilling costs, and the field's proximity to infrastructure. The Company plans to commence commercial production of East Tegen-1 as soon as possible; discussions are already underway with several crude buyers that are active in the region.

David Robinson, Chairman and Chief Executive Officer, stated, "We are very pleased with the results of the East Tegen-1 well, the first well drilled by Aurado in Kazakhstan. This well exceeded our expectations, and it verifies our belief in the potential of the Liman Block."

The success at East Tegen-1 demonstrates the commercial viability of the post-salt play in the Liman Block. The Company will continue with the development of the East Tegen Field in conjunction with an evaluation program for the other post-salt prospects on the Liman Block. There are at least 56 additional prospects in the post-salt section which were assessed to have resource potential of 708 million barrels by the independent engineering firm of Sproule International Limited of Calgary, Canada.

The Company is seeking to secure additional rigs to develop the East Tegen Field, while exploring other parts of the Liman Block. One of the next locations will be the Yamanka Field in the east of the Block where there are also indications of shallow oil on earlier drilling logs. The Company also has drilling targets at slightly deeper levels in the south of the Block.

As a longer term goal Aurado is preparing an evaluation plan for the deep pre-salt section in the Liman Block. Anomalies have been recognized at this level at depths of around 5000 meters, in the same geological level as the super-giant Kazak oil and gas fields, Tengiz (7-9 billion barrels) and Kashagan (8-13 billion barrels). Further seismic data will be required to delineate these features prior to deep drilling.

Liman Block