Calvalley Plans Two More Wells in Yemen

Calvalley says that its plans for the drilling of the next two exploration wells in Yemen were delayed during the first quarter as a result of the war in Iraq. However, work continued in order to finalize the drilling locations and secure many of the required supplies and services.

The company now plans to drill the two new wells by the end of the third quarter. The Company's joint venture partners would provide the estimated $US 4 million required. At present the Company, as operator, is finalizing the arrangements for the drilling rig that will be utilized. Management is focused on raising capital for the initial development of the Block, which we hope to initiate later this year. The initial development plan contemplates the drilling of eight wells in the Hiswah and Auqban formations late this year or early in 2004.