Aegean Starts 2nd Phase of Drilling at Epsilon Offshore Greece

Aegean Energy, the majority shareholder of Kavala Oil, which is the only operator of Oil and Gas in Greece, following the successful completion of well PNA-H3 in the Prinos North field, announces the commencement of new drilling operations in the Epsilon Field, according to the development plan approved by the Ministry of Development.

The Company announces the signing of a drilling contract for the Ensco 85 (E85) jackup drilling rig, which will undertake the drilling operations, the signing of a $50 million financing agreement with Standard Chartered Bank and the appointment of Schlumberger to provide drilling management services.

The E85 constitutes one of the 42 jackup rigs of Ensco International, designed to operate reliably all year round assisted by a staff of 80 people on a 24 hour basis. E85 is a Jackup Rig type independent leg cantilever, with maximum drilling depth of up to 7,600 meters and 2,000 HP drawworks. Additionally the Ensco85 was awarded the best performing Ensco Rig in 2007, ensuring operational excellence in 2008 and 2009.

The new well is expected to reach a total depth of 5,500 meters and vertical depth of 2,900 meters, while the drilling operations are estimated to last approximately 90 days. Based on these significant data, the Epsilon well represents the deepest and longer ever drilled in Greece. The commencement of the operations for Aegean Energy with the Ensco85 rig will start by the end of September.

Mathios Rigas, Chairman and Managing Director of Aegean Energy S.A., stated, "Aegean Energy and Kavala Oil enter a new phase of this long term investment, which actually represents a landmark in the realization of our business plan. Our company has made significant steps towards the effective exploitation of our national resources, in order to secure a safe business environment for the company, as well as for the sustainable growth of the local and national economy. In this aspect, we proceed with a team driven by clear vision, solid expertise and long experience in its sector. We would like to sincerely thank Standard Chartered Bank, for its trust and confidence in this successful collaboration. Moreover, the agreements with leading companies of the sector, such as Ensco International Incorporated and Schlumberger, guarantee excellent execution of the Project.

Mr. Evaggelos Pappas, President of the Board of Directors of Kavala Oil, commented, "The exploitation of the Epsilon field represents a long awaited demand by the employees of the company and the local community of Kavala. Today, we are grateful and happy to see that we have achieved our highest goal. We strongly believe that the completion of this investment project will bring significant benefits for both local and national economy."