Leed Carries on with Production Preparations at Eugene Island Field

Leed Petroleum PLC has announced an update on activity at the Eugene Island field.

Since concluding drilling of the Eugene Island A-7 well, the Company has been working on casing and completing the well for production from one of the primary zones. The Company has not been able to produce a consistent flow rate from this zone and extended testing will be required to fully evaluate its potential.

Accordingly, in order to achieve its targeted commercial production from the A-7 well, the Company will move up the wellbore and begin producing from another of the primary zones intersected by the well. If deemed appropriate, the Company will consider returning to the deeper zone in the future. Completion of the shallower reservoir is expected to take approximately six weeks.

In the interim, the Company has performed preliminary work for the Eugene Island A-8 well. The Eugene Island A-8 well will target a superior "take-point" from the exploration target discovered by and currently producing through the A-6 well.

Since commencement of production from the secondary exploration target of the A-6 well, an extended flow test has been conducted, with the results of this test corroborating the Company's reserve estimates. The A-6 well began to make sand during the test, and while this reservoir continues to produce, the Company has reduced the flow rate to ensure operational safety. The curtailed gross test rate during August to date has averaged 988 BOEPD. Following completion of the A-8 well, the A-6 well will be recompleted as a long term producer from its primary zone, as has always been the Company's intention. It is anticipated that production rates for the A-6 will then return to previously announced levels.

The Eugene Island Blocks are located 50 miles offshore, south of Morgan City, Louisiana in the Gulf of Mexico in approximately 80 feet of water. Leed's management has built an inventory of development projects and exploration targets across the Eugene Island Block 183/184 Field.

Howard Wilson, President and Chief Executive of Leed Petroleum PLC, commented, "We remain very confident that the A-7 well will perform to our expectations. It is unfortunate that we have experienced this delay, however, the long term development and acceleration program for the Eugene Island 183/184 field remains on track. In addition to reserves scheduled to be produced from the A-7 well, the A-8 will develop existing reserves discovered during the current drilling program as well as test at least one exploratory target."