Cloudbreak Regulatory News (CDL)

20 Sep 2006 08:55

Cardinal Resources plc20 September 2006 CARDINAL RESOURCES PLC ANNOUNCES OPERATIONAL UPDATE LONDON - Wednesday, 20th September 2006 Cardinal Resources plc (AIM:CDL) ("Cardinal" or "the Company"), an independentoil and gas production and exploration company operating in Ukraine, todayannounces an operational update. The Dubrivska (DB) #2 exploratory well has been drilled to a total depth of3,806 metres with the primary objective of testing a potential carbonatereservoir in the Visean Carbonate Plate. Work on this well was started by RudisDrilling Company in June of 2005 prior to its acquisition by Cardinal in October2005. It was drilled using Ukrainian equipment with total depth reached in March2006. The well, which is covered by a 50/50 joint activity agreement (JAA #429)with Ukrgazvydobuvannya (Ukrgaz), encountered encouraging hydrocarbonindications within the Carbonate Plate; however, tests of the primary objectiverecovered non-commercial quantities of light oil. A secondary objective in the Visean-19 (V-19) formation between 3,420 and 3,430metres was also tested with encouraging indications of gas and condensate. Teststo date of the V-19 have produced at an undetermined rate a mixture of gas,condensate and water, with water dominating. Log analysis indicates that theV-19 is hydrocarbon bearing and Cardinal believes the water is most likelycoming from a water-bearing sand below the V-19. With the presence of hydrocarbons on the Dubrivska licence confirmed by the DB #2 well, Cardinal has begun a 3-D seismic survey covering approximately 25 squarekilometres on the licence, the results of which should be available by spring2007. The seismic will be evaluated in conjunction with the V-19 and CarbonatePlate hydrocarbon indications to decide whether further drilling on the licenceshould take place. The DB #2 well has been temporarily abandoned pending theresults of the 3-D survey. An agreement has been made with Ukrgaz to take wells #18 and #26 on theKulickykhin Field out of JAA #429 and return them 100% to Ukrgaz. Production atthese wells has declined significantly since the beginning of the year - Julyproduction averaged 42 boepd versus 256 boepd in February. In return, Ukrgaz hasverbally agreed to complete the North Yablunivska (NY) workovers of wells #201,#203 and #300 at their expense. The workover of NY #203 is ongoing. Well #4 on the North Yablunivska (NY) licence, which is covered by JAA #429, hasspudded. The objective is the Tournaisian 1 (T-1) reservoir and total depth isto be 5,400 metres. The well is being drilled with a Ukrainian rig hybridisedwith modern drill bits and mud conditioning equipment. Cardinal will release its interim results on Wednesday, 27th September. Cliff West, Executive Vice President and Chief Operating Officer of Cardinal(Member of the American Association of Petroleum Geologists - CertifiedPetroleum Geologist # 1563) is the qualified person that has reviewed andapproved the technical information within this press announcement. Glossary of Termsboepd barrels of oil equivalent per day ### 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 plcCardinal Resources plc is an independent oil and gas company engaged in theacquisition, development, production and exploration of oil and natural gasproperties in Ukraine. Cardinal is an experienced operator in the countryfocused on expanding its existing operations through the farm-in or acquisitionof additional upstream oil and gas assets that can be further developed throughthe 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 TCForiginal gas in place), located in the Dnieper-Donets basin, 200km east of Kievin 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, 45kmsouth-west of Ivano-Frankivsk in the Nadvirna Oblast. Cardinal has a 45%interest through UkrCarpatOil, a Joint Venture (JV) with Ukrnafta, to operateand develop the field. Plus the following assets which were acquired as part of the Rudis DrillingCompany transaction in 2005: Bilousivsko-Chornukhinska (BC) LicenceBilousivsko-Chornukhinska is a producing gas-condensate licence in theDnieper-Donets basin, owned and operated by Cardinal. North Yablunivska (NY) LicenceNorth Yablunivska is a producing gas-condensate licence in the Dnieper-Donetsbasin, owned by Cardinal and operated under the JAA. Dubrivska (DB) LicenceCardinal has drilled an exploration well as part of the JAA withUkrgazvydobuvannya. Ukrgazvydobuvannya JAA #429Cardinal has a 50% percent interest in a JAA with Ukrgazvydobuvannya whichcovers certain wells on the NY licence area and one well in the Bilskie field. This release may contain certain forward-looking statements. These statementsrelate to future events or future performance and reflect management'sexpectations regarding Cardinal's growth, results of operations, performance andbusiness prospects and opportunities. Such forward-looking statements reflectmanagement's current beliefs, are based on information currently available tomanagement and are based on reasonable assumptions as of this date. Noassurance, however, can be given that the expectations will be achieved. Anumber of factors could cause actual results to differ materially from theprojections, anticipated results or other expectations expressed in thisrelease. While Cardinal makes these forward-looking statements in good faith,neither Cardinal, nor its directors and management, can guarantee that theanticipated future results will be achieved. This information is provided by RNS The company news service from the London Stock Exchange