Aladdin to Spud Well on Reef Prospect

On Christmas Eve Aladdin Oil & Gas Company AS (AOGC) will spud an exploration well on the reef prospect on the Bogdanovskaya license in Orenburg. All the necessary preparations are complete and the equipment is on location. The well will be drilled to a total depth of approximately 1000m, and this is expected to take 6 weeks. This is an exciting prospect and our geologists/geophysicists have estimated the possibility of discovery at 30%.

At the same time the company will spud a new gas well (1D) on the gas field on the Middle Sedolskaya license in Timan-Pechora. This is the third production well the company is drilling on the gas field, and it is planned to be drilled to around 800m total depth. The drilling of the well is expected to take around 4-6 weeks. This well will be put on commercial production together with wells 1A and 1C during spring 2009.

The company expects start-up of the construction of a gas pipeline for the gas project already in early January. Some 1000m of pipeline will be built linking the production wells to the connection point at the main pipeline.

In order to acquire necessary and desirable seismic data on the West Ukhtinskoye license (WU) and MS license in Timan-Pechora, the company is now in the final phases of the process to purchase its own seismic equipment. This will make the company more flexible and able to acquire seismic in the areas where such are needed. It has proven difficult to find seismic contractors who can shoot the necessary seismic where the company needs such. Therefore the company has decided to purchase its own seismic equipment. This equipment is expected delivered from the US during February, and the necessary personnel will be trained by the supplier. The company is in need of more seismic data in Ukhta in order to design a more accurate and efficient drilling program on the structures already mapped and identified.

Testing of 12B

Drilling of the well 12B is nearing the planned total depth of 340m. The well will be logged and subsequently tested if the logs warrant such.

With respect to the private placement towards Venatino Trading Ltd.; the company has now received USD 3 Million, which is according to the agreement between the companies. The company issues the necessary shares according to payments received. The placement is expected complete by January 31st 2009.

"The winter season is an important time for the company which is now in a very active season. In addition to the above mentioned operations, seismic acquisition is planned and several new oil and gas prospects are planned to be drilled in Timan-Pechora, in addition to the sidetracked wells planned on existing oil structures in Orenburg. In particular the gas project will provide the company with steady income," says General Manager Hans-Axel Jahren.

"The company is in regular contact with representatives of Venatino and has a very positive and constructive dialogue with them. We are looking forward to co operating with them in 2009," he adds.