EXI.L Regulatory News (EXI)

Exillon Energy plc

Drilling and operations update

26 March 2010

Exillon Energy plc ("Exillon" or the "Company") is pleased to announce the successful completion of the EWS-15 well with an oil flow rate of 550 bbls/day from the Jurassic interval and confirmation of the presence of a reservoir in the Pre-Jurassic interval.

The EWS -15 well ("the well"), which was spudded on 29 December 2009, was designed to test the northern extension to the EWS I field. The well flowed water-free oil naturally to the surface with a flow rate of 550 bbl/day on an 8 mm choke, and was drilled on a turn-key contract for a total consideration of US$ 0.975 million. The well reached target depth within the Jurassic P reservoir at 1827.5 - 1842.7m, confirming the presence of 15.2 m of net oil pay within the Jurassic. This is the thickest net oil pay encountered within the EWS I field to date. The average net oil pay within the Jurassic reservoir of the EWS I field, according to the Miller and Lents September 2009 reserves report is less than 5 m. The well confirmed the presence of a reservoir in the pre-Jurassic complex, though this interval has flowed water from the EWS-15 well.

The well was drilled directionally 1.4 km to the north from the existing EWS I field, and is now being connected to existing production facilities in the EWS I field.

Production update

On 18 March 2010, Exillon reached a combined production rate of 3,400 bbls/day from the Exillon TP and Exillon WS fields (Exillon TP 2,950 bbls/day; Exillon WS 450 bbls/day). Production at Exillon WS commenced upon signing an oil processing agreement with Aki Otir, a subsidiary of Russneft, on 3 March 2010.

Exillon WS fields continue to have additional behind-pipe production capacity of 2,800 bbls/day. Combined total production of 6,200 bbls/day is expected to commence in Q3 2010, upon completion of the pipeline and infield infrastructure projects. The pipeline is being put in place to resolve the issue of seasonal production from the Exillon WS fields; the pipeline is currently under construction with 16 km out of 42 km already in place.

On 24 March 2010, the Company spudded Well 34 on EWS I field, which is one of the 6 additional wells in Exillon WS, which are expected to increase production significantly upon completion.

Acquisition of the North Kenyunskoe Licence

On 25 February 2010, the Company acquired the North Kenyunskoe license in a state auction.

The North Kenyunskoe Licence covers 119 km² and lies immediately to the East of the ETP IV field which is owned by the Group's Exillon TP subsidiary. The Licence is located in the Komi Republic, Timan Pechora, approximately 63 km from the town of Usinsk.

The North Kenyunskoye license is largely covered by 2D and 3D seismic, and consists of four main structures with recoverable oil reserves and resources currently estimated at:

C2 - 16 mmbbls;

C3 - 3.6 mmbbls;

D1 - 8.7 mmbbls.

The seismic data has not yet been acquired by the Company.

The prospects in the North Keinyunskoye block relate to sediments in the Lower Permian, Upper Devonian and the Lower Silurian Periods.

This licence acquisition represents a significant addition to Exillon's portfolio. Exillon will develop the Licence using the Company's technical expertise to create further value for shareholders.

Update on the operational management structure

On 15 March 2010, Exillon moved its operational management centre to Urai (Khanty-Mansiysk Autonomous Okrug, Western Siberia, Russian Federation), which is located close to its Exillon WS assets. The move will reduce operating costs and improve management oversight as the Group enters a new phase of development focused primarily on production.

This move will ensure that Exillon has the right management on the ground to deliver operationally as the Company focuses on increasing production at Exillon TP and Exillon WS.

Exillon has appointed Yuri Ovcharov as its new Chief Operating Officer. Prior to joining Exillon Yuri Ovcharov was with Nobel Oil where he was the Executive Director of projects in Myanmar and also Director of Mineral Resources. In Khanti Mansiysk, Western Siberia, Yuri held the position of General Director at Canbaikal Resources and was responsible for increasing production with a high drilling success rate in a challenging reservoir. Between 2002 and 2003 Yuri was Director of the Federal Fund of Geological Information (Geoinfoteka) at the Ministry of Natural Resources of the Russian Federation, where he was responsible for creating licensing procedures, and organizing the geological data for all oil and gas assets in the Russian Federation into a single database. Yuri began his career in 1987, as a geologist at the production and geological association Ukhtaneftegasgeologia, Timan Pechora and was responsible for discovering the ETP II field, which is one of the largest structures currently owned by Exillon TP.

Exillon is delighted to welcome Yuri Ovcharov as its Chief Operating Officer. Yuri brings with him an outstanding track record of success throughout his 25 years in the international oil and gas industry. His unparalleled understanding of the geology of Exillon's assets and his technical expertise make him the ideal fit for this position.

Former COO David Sturt is expected to remain with the Group in a consultancy role, but will not be involved in day to day management.

Contact details: