Cloudbreak Regulatory News (CDL)

8 Sep 2006 15:39

Cardinal Resources plc08 September 2006 CARDINAL RESOURCES PLC ANNOUNCES DRILLING UPDATELONDON - Friday, 8th September 2006 Cardinal Resources plc (AIM:CDL) ("Cardinal" or "the Company"), an independent oil and gas production and explorationcompany operating in Ukraine, today provides an update of the drilling of well #3A on the Bilousivsko-Chornukhinska(BC) licence. The BC #3 well was originally drilled by a Ukrainian state entity in 1957 and produced approximately 600,000 Mcf fromDecember 1962 to October 1968 when the well was plugged due to water influx. An attempt to re-enter and work the wellover was made by Rudis Drilling Company in 2003 but was unsuccessful. Cardinal acquired 100% of the BC licence as partof the Rudis Drilling Company acquisition in October 2005. Based on its review of the technical information, Cardinaldetermined the BC #3 well should be re-drilled. The re-drill of the new well, BC #3A, commenced in June 2006. In early August the Visean-17 (V-17) formation wasreached at 3,000 metres. Cardinal's evaluation showed non-commercial indications of gas in the V-17. The well was thendeepened to 3,300 metres and the evaluation of this lower interval shows the presence of three zones in the Viseansection (V-18, V-20 and V-21). No tests have been run to recover gases or liquids yet; but, based upon wireline loganalysis, these three zones appear to be hydrocarbon-bearing; and two of the zones are potentially capable ofcommercial production. The well has been prepared for flow testing zones V-18 and V-20, which will take place over thenext 60 - 90 days. The BC #3A well was drilled using a Ukrainian rig hybridized with modern drill bits and mud conditioning equipment.The well was expected to take in excess of eight months to drill but was completed ahead of schedule, in just 76 days,due to the use of modern equipment. Cliff West, Executive Vice President and Chief Operating Officer of Cardinal (Member of the American Association ofPetroleum Geologists - Certified Petroleum Geologist # 1563) is the qualified person that has reviewed and approved thetechnical information within this press announcement. Glossary of Terms Mcf Thousand cubic feet of gas ### For further information please contact: Cardinal Resources Parkgreen CommunicationsKate Spiro Justine Howarth / Victoria Thomas+44 (0) 20 7936 5258 +44 (0) 20 7493 3713kspiro@cardinal-uk.com victoria.thomas@parkgreenmedia.com Notes to Editor Cardinal Resources plc Cardinal Resources plc is an independent oil and gas company engaged in the acquisition, development, production andexploration of oil and natural gas properties in Ukraine. Cardinal is an experienced operator in the country focused onexpanding its existing operations through the farm-in or acquisition of additional upstream oil and gas assets that canbe further developed through the application of modern technology and expertise. Cardinal's main assets are: Rudivsko-Chernovozavodske (RC) FieldRudivsko-Chernovozavodske is a large under-developed gas field (1.54 TCF original gas in place), located in theDnieper-Donets basin, 200km east of Kiev in the Poltava Oblast. Cardinal has a Joint Activity Agreement (JAA) with asubsidiary of Ukrnafta for production and further development. Bytkiv-Babchenske (Bytkiv) FieldBytkiv-Babchenske is an oil field, located in the Carpathian fold belt, 45km south-west of Ivano-Frankivsk in theNadvirna Oblast. Cardinal has a 45% interest through UkrCarpatOil, a Joint Venture (JV) with Ukrnafta, to operate anddevelop the field. Plus the following assets which were acquired as part of the Rudis Drilling Company transaction in 2005: Bilousivsko-Chornukhinska (BC) LicenceBilousivsko-Chornukhinska is a producing gas-condensate licence in the Dnieper-Donets basin, owned and operated byCardinal. North Yablunivska (NY) LicenceNorth Yablunivska is a producing gas-condensate licence in the Dnieper-Donets basin, owned by Cardinal and operatedunder the JAA. Dubrivska (DB) LicenceCardinal is currently drilling an exploration well as part of the JAA with Ukrgazvydobuvannya. Ukrgazvydobuvannya JAA #429Cardinal has a 50% percent interest in three wells in two other fields (Kulickykhin and Bilskie) in the Dnieper-DonetsBasin under a JAA with Ukrgazvydobuvannya.This release may contain certain forward-looking statements. These statements relate to future events or futureperformance and reflect management's expectations regarding Cardinal's growth, results of operations, performance andbusiness prospects and opportunities. Such forward-looking statements reflect management's current beliefs, are basedon information currently available to management and are based on reasonable assumptions as of this date. Noassurance, however, can be given that the expectations will be achieved. A number of factors could cause actual resultsto differ materially from the projections, anticipated results or other expectations expressed in this release. WhileCardinal makes these forward-looking statements in good faith, neither Cardinal, nor its directors and management, canguarantee that the anticipated future results will be achieved. This information is provided by RNS The company news service from the London Stock Exchange