Rally Increases Production from Ras Issaram Field

Oil production from Rally Energy's Issaran oilfield in Egypt has increased since August to approximately 1,200 bbls/d. The increase is due to production from two recently drilled wells and continued optimization of existing wells through perforation of additional zones, pump capacity changes and conversion to progressive cavity pumps.

Average oil production for the third quarter is expected to exceed 850 bbls/d. Oil production currently stands at approximately 1,200 bbls/d. Of current production, about 60% is derived from new wells drilled by Rally Energy since November of 2002. The 3-D seismic data used to select drilling locations for the new wells is currently being reviewed. Reprocessing may be required to calibrate the data to recent drilling results and select new well locations. It is anticipated that the reprocessing should be completed by October 31.