FCP to Jointly Develop MLE Field with Sonatrach

First Calgary Petroleums has reached an agreement in principle with Sonatrach, the Algerian National Oil Company, to jointly develop the Menzel Ledjmet East (MLE) gas and condensate field in Block 405b of the Berkine Basin.

FCP and Sonatrach have agreed to work together to finalize the plan for development of the MLE field. Preparation for front-end engineering and the awarding of an engineering, procurement and construction (EPC) contract are anticipated in 2004 with first production expected in 2007. It is projected the development plan will include the construction of a 650 million cubic feet per day plant for processing natural gas and natural gas liquids. The cost of the development, including development wells, field gathering, facilities and tie-ins is estimated to be in excess of US $700 million. As part of the agreement, FCP and Sonatrach have agreed to jointly secure markets and Sonatrach has further agreed to allocate sufficient pipeline capacity to deliver the product. The independent engineering firm of DeGolyer and MacNaughton has estimated gross proved, probable and possible reserves to Ledjmet Block 405b of more than 5.7 trillion cubic feet of gas equivalent (TCFe) of recoverable natural gas reserves. Since these reserve estimates were prepared, FCP has drilled two additional appraisal wells which have extended the current limits of proved and probable reserves. FCP has recently completed the acquisition and interpretation of 600 square kilometers of 3D seismic immediately adjacent to and west of the MLE field. Based on the results, the Company intends to accelerate its drilling program on Block 405b by contracting a second drilling rig. At least eight exploration and appraisal locations have been identified for drilling on the Block over the next year.

Richard Anderson, president and CEO of FCP stated, "We are delighted to receive this confirmation from Sonatrach regarding the joint development of the field and the pipeline allocation. This represents a significant step towards monetizing the reserves. Within two years of obtaining the Block, the Company has acquired 700 square kilometers of 3D seismic, drilled wells and confirmed the reserves to be world class in size containing an estimated 5.7 TCFe. Algeria, as a member of the Gas Exporting Countries Forum, is strategically located to capitalize on the growing gas market evolving in Europe as well as the expanding liquefied natural gas (LNG) market throughout the world."