Norwood Pumps 38.5 API Light Crude Oil from SB-1X2 in Nicaragua

Norwood Resources has updated on the status of current drilling and testing operations for the San Bartolo-1X2 sidetrack well in Nicaragua.

The current depth of the well is 6340'. As previously released, the objective of this sidetrack well is to evaluate fluid content and potential productive oil flow rates from up to four (4) priority pay zones identified on logs from the Upper Brito formation. Thus far, three (3) of the four (4) zones have been penetrated (zones 10, 9 & 7). Zone 10 proved to be tight with no fluids recovered. 57.3 barrels of light crude oil measuring 38.5 API gravity have been recovered in swabbing operations from zones 9 and 7 to date.

Zone 9 (6060'-6110') recovered 18.3 barrels of oil and no water in 5.4 hours. A pressure drop of 1005psi during this drawdown indicates this zone will need stimulation for sustained production. Zone 7 (6252'-6295') recovered a total of 39.0 barrels of oil. 22 barrels of pure oil were recovered in the first 3.1 hours with only a 248psi pressure drop. Bottom-hole pressure data from shut in response predicts a maximum flow rate of 416bopd from this zone. Fluorescent, medium-grained sandstone cuttings were observed in 35'of the 43' sandstone interval and this is considered the permeable reservoir facies.

Ten hours after the commencement of Zone 7 testing, swabbing operations started to recover contaminated fluid which lab analysis shows to be brine (16,000ppm chlorides) with high Calcium (5000ppm), Potassium (500-2500ppm), and low pH (5.8-6.0). It is interpreted that this fluid is a mixture of drilling and completion fluids used in the San Bartolo-1 wellbore where a small (240bbls) acetic acid frac, performed in July 2007, has likely contacted this sidetrack. The zone 7 penetration point in SB-1X2 is about 65' away from the site of the 2007 acid frac. Swabbing operations of the SB-1X2 zone 7 sands continue with the objective of removing all the previously injected drilling fluid and return the well production to pure oil. The penetration of zone 6, anticipated at 6390'-6410' has been postponed pending cleanup and testing of zone 7.

Additionally, significant gas was flared during the swabbing of both zones. No free gas is indicated on well logs indicating that the reservoirs are driven by the expansion of low saturation gas in solution. This drive mechanism is characteristic of oil production from reservoirs with no water support and no production of water during oil recovery. This supports the interpretation that continued production from zone 7 should remove all foreign fluids and return the production to clean oil.

Although the conclusive recovery of light gravity oil is very encouraging, additional testing and flows need to be completed in order to determine the potential for commercial viability. The Company will provide further updates as operations progress.