Canoro Updates on Drilling at Northeast India Exploration Block

Canoro Resources is updating the drilling and status on the AA-ON/7 exploration block in northeast India. Canoro has completed its appraisal drilling operations at Dergaon #2. The targeted zone was of equivalent structural height to Dergaon #1, but appeared non-hydrocarbon bearing on well-log data. Consequently, the Dergaon #2 appraisal well has been plugged and abandoned.

The Company is currently evaluating the status of the AA-ON/7 block which comprises 473 km2 in the State of Assam and 319 km2 in the State of Nagaland. Given the results of Dergaon #2 and given that the Company has no further drilling operations contemplated on the Assam side of the Block, the Company plans to relinquish, subject to Government of India and partner approvals, this acreage back to the Government of India. As a result of the planned relinquishment, probable reserves of 21.2 BCF (3.5 MMBOE) net to Canoro's 65% working interest and possible reserves of 15.8 BCF (2.6 MMBOE) net will be written down by the Company, also subject to Government of India approval. Any relinquishment of AA-ON/7 will not affect any proven reserves of the Company previously reported.

The Nagaland portion of the Block is under consideration by the Government of India to be included in a new Production Sharing Contract which if approved, is expected to be awarded to the Company in 2009.