SAGA Successfully Drills in Orenburg, Increases Resources

SAGA Oil continues its progress in its Russian oil venture in the Orenburg region. The positive drilling results this spring will lead to a revised reserve potential in addition to the March acquisition of a significant new, prospective acreage in Orenburg. The new well #107 has penetrated a previously non-confirmed part of the Tournaisian formation. The well data has proven that the water-oil contact is 5 meters lower than previously assumed by the 3D seismic. This is a significant discovery since a lower water oil contact results in thicker production zone for the northern Tournaisian block. It also confirms the total thickness of the best Tournaisian production zone to be 24 meters in the dome section.

Well #107 was originally dedicated to be the first injection well on East Shaltinsky, but it will now be prepared for re-classification to a production well and will be put onstream as soon as possible.

This latest discovery will also change the resource base and development plan since the potential of the northern Tournaisian block has increased.