Alange Confirms Oil Discovery in Catatumbo Basin

Alange has confirmed a discovery in the Pajarito-1X well that was drilled to a total depth of 2,002 feet to explore the oil prospectivity of the Catatumbo, Barco and Mito Juan formations in the Carbonera Block. Covering an area of 64,000 acres, the Carbonera Block is located in the Catatumbo Basin, which constitutes an extension of the highly prolific Lake Maracaibo Basin of Venezuela.

Luis E. Giusti, the Company's Chief Executive Officer, commented, "This discovery could lead to an important development of shallow non-conventional ultra light oil. Although the type of reservoir has low energy, a small spacing well pattern and proper pumping equipment could deliver important value, as in fields like Ancon in Ecuador and Sardinata in Colombia, which is also in the Catatumbo Basin. As well, supplementary recovery could be possible."

Well logs indicate the presence of hydrocarbons in several horizons. The top of the Mito Juan sandstones was found at a depth of 542 feet, with petrophysical evidence showing 5 feet of net pay zone. The top of the Upper and Lower Catatumbo sandstones was found at depths of 452 feet and 1,030 feet, with petrophysical evidence showing 22 feet and 32 feet of net pay zone, respectively. Both formations, with a total vertical oil column of 59 feet, represent new discoveries within the Carbonera Block. Representative tests were limited to Mito Juan because of high skin damage in the remaining intervals. Pajarito-1X was tested using a wire-line pump, producing 14 barrels of 41 degrees API oil in 20 hours. Still to be determined is the capacity of the reservoir to replenish the fluid level in the well; at the same time the Company intends to test for a possible supplementary recovery project based on miscible displacement. Abundant high pressure CO(2) for that testing is available nearby.

Pajarito-1X is the first well to be tested in the Upper Cretaceous and Tertiary sands, showing good petrophysical characteristics: porosity of 15%, water cut of 34% and 41 degrees API oil in the Mito Juan Formation. Correlation of this well with seismic and petro-physical information in the surroundings, suggests a significant areal extension that, if confirmed, could translate into the immediate design of an appraisal campaign. The seismic available includes 88 km(2) of 3D, in addition to old 2D. The neighboring wells, Cerro Gordo-2, Cerro Gordo-4 and Paramito-1X, confirm thickening and better sand properties in the whole section toward the north and west of Pajarito-1X well. The same can be observed in Cerro Gordo-1 and Cerro Gordo-3 toward the southeast. The distances from Pajarito-1 to Paramito-1 and Cerro Gordo-1 are 500 and 1,200 meters respectively.

Evaluation is in progress and the well is currently scheduled to have proper beam pumping installed in order to continue with further testing on the Mito Juan Formation on the up-thrown side of the fault.

With the drilling of Pajarito-1X, the Company has taken the first step to continue exploration in the Upper Cretaceous and Tertiary sandstones in the Carbonera Block. The Company holds a 96% working interest in the block.