Stratic, JV Partners Cease Operations at UK North Sea Well

Stratic announced that following a series of operational difficulties, Stratic and its joint venture partner have decided to cease operations on well 16/2b-5A in the UK North Sea.

The operational difficulties included an unsuccessful attempt to retrieve drill pipe lost in the hole, which required the well to be re-spudded on December 8, 2008, and the failure of the top drive mechanism on the drilling rig last week, together with considerable downtime throughout the operation as a result of adverse weather conditions. The well was drilled to a total depth of 6,370 feet, having encountered oil shows in two exploration objectives (Skroo and Flugga), and has satisfied the work obligation on Block 16/2b.

The planned deviated appraisal section of the well into the Cairngorm granite discovery was not attempted in the circumstances and the well is currently in the process of being abandoned. Stratic's share of the total cost of the well amounted to approximately $19 million. The joint venture partners will assess over the coming months whether further activity on the acreage is justified in the current economic climate.

Mark Bilsland, Stratic's Chief Operating Officer commented, "We are naturally disappointed not to have completed the drilling of well 16/2b-5A but, given the current economic climate, we believed we had reached the point where the risks of continuing outweighed the likely benefits. In these circumstances the prudent course of action was to cease operations and limit our exposure to further costs."