Valkyries Petroleum Spuds Queen City Well

Valkyries Petroleum reports that the Santos B Morgan #1 gas exploration well spudded on April 21, 2003. The well is testing the Mew North prospect located directly on trend with the Cuatro de Julio (11.3 bcf) and Agua Prieta (6 bcf) producing fields. Expected total depth of the well is approximately 8,700 feet.

The Company's Queen City gas project encompasses a large land position of over 12,000 acres. It is located within the prolific Queen City gas trend which has yielded significant gas discoveries in recent years for operators such as Chevron in the vicinity of the 120 billion cubic feet (Bcf) Mestena Grande field. The play consists of deltaic Queen City sands trapped along a regional fault trend. Individual wells on trend produce an average of 5 million cubic feet of gas per day and provide excellent analogues for prospects in the play area.

New 3D seismic has identified several strong prospects on VPC's properties, including the Mew North prospect now being tested, that range in size potential from 7 to over 20 Bcf of gas. The presence of seismic amplitude anomalies with an Amplitude Versus Offset (AVO) signature characteristic of gas sands, greatly enhances prospectivity. Several additional 2D seismic leads exist on the properties. A new 3D seismic survey is proposed to further delineate these leads.

The Queen City concessions, located in Duval and Jim Hogg counties, Texas, are held by a private company. VPC is acquiring 75% of the company's various interests in these concessions in exchange for paying 75% of the lease acquisition cost and 75% of the drilling of two exploration wells.