VGAS.L Regulatory News (VGAS)

10 Jun 2009 07:00



10 June 2009

VOLGA GAS PLC

Drilling update - Karpenskiy supra-salt

Volga Gas Plc ("Volga Gas") issues the following operational update on its activities.

Karpenskiy Licence Area - Supra Salt

The V-Uzenskaya-7 supra salt exploration well has been drilled, tested and completed as a potentially commercial oil discovery. The well was drilled on a surface location approximately 7km to the east of the Uzenskaya field production facilities on an exploration target separate from the Yuzhny Uzenskaya oil field which is currently in production.

The principal exploration objective in the well was found to be water bearing, however an oil bearing reservoir was discovered at a deeper horizon.

A Jurassic sandstone reservoir was discovered in an interval between 1,007 and 1,021 metres depth of which a 1.5 metre interval was oil bearing. The well was cased and tested and produced small quantities of oil.  Further evaluation of the discovery, including a 3-D seismic survey and, potentially further appraisal drilling, will be required to determine the reserve potential and productivity of this new discovery.

Mikhail Ivanov, Chief Executive of Volga Gas commented: 

"While we were disappointed not to find hydrocarbons in our main target, this new discovery provides a potential target for future appraisal drilling. Any additional oil reserves in this area can very easily be developed using infrastructure that we have already installed on the Uzenskaya field."

- Ends -

Volga Gas is an independent oil and gas exploration and production company, which currently holds four subsoil licenses in the Volga Region of European Russia

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The information contained in this announcement has been reviewed and verified by Mr. Mikhail Ivanov, Director and Chief Executive Officer of Volga Gas plc, for the purposes of the Guidance Note for Mining, Oil and Gas companies issued by the London Stock Exchange in March 2006. Mr. Mikhail Ivanov holds a M.S. Degree in Geophysics from Novosibirsk State University. He has also MBA degree from Kellogg School of Management (Northwestern University). He is a member of the Society of Petroleum Engineers.