Premier Energy to Update Russian Oil Wells, Increase Production

Premier Energy Corp. has commenced a program of modernization of wells in Russia. Premier Energy Corp. is a U.S. based international oil and gas company with current operations in Russia through its majority-owned subsidiary, Karbon CJSC, which holds exploration and production license for the North-Kopanskoye Oilfield in the Volga-Urals Basin.

As the most expeditious way to quickly increase production output, Karbon CJSC has commenced a program of repairs and modernization of the existing wells in the North-Kopanskoye Oilfield in accordance with the approved schedule for work-over of the shut-in oil wells. The exploration wells drilled in 1980s, and subsequently completed and produced, have been shut-in in the meantime due to needed repairs. The current plans call for routine re-work on two shut-in wells by July and full work-over on additional two shut-in wells by the end of 2009. The aim is to increase production rate in this year from the present 60 bopd to the expected 400 bopd from the existing wells. Local Russian Contractors, Almaz Service and ServiceNefteGaz, specializing in oil well work-over and modernization, have begun mobilization of the equipment needed to start work by mid-May at the North-Kopanskoye Oilfield.

Subject to the availability of funds, the current plans also call for other concurrent work, including drilling and completion of three new production wells in 2009 at the North-Kopanskoye Oilfield. Produced oil is presently trucked away after being sold at the wellhead at field-posted prices. With the planned increases in oil production output, the intent is to switch from trucking to more efficient and economic oil export via the adjacent GazpromNeft pipeline system, provided the demand for crude keeps as expected. All needed infrastructure already exists for pipeline export.