VOG.L Regulatory News (VOG)

30 Oct 2007 07:01

Victoria Oil & Gas PLC30 October 2007 Aim Release30 October 2007 Victoria Oil & Gas Plc Drilling Update at Kemerkol Oil Project, Kazakhstan Victoria Oil & Gas Plc ("Victoria" or "the Company"), (AIM:VOG), the oil and gascompany focused on Russia and Kazakhstan, today announces that it has completeddrilling of exploration Well 66, commenced operation of pumping at Wells 20 and73 and commissioned a full geological and geotechnical review of its wholly-owned Kemerkol oil project in the Atyrau Oblast of Kazakhstan. Well 66 was drilled to a total depth of 1,102 metres to explore the easternsection of the licence block. Although oil saturations were found in the drillcuttings, the logs indicated that these saturations were not sufficient forcommercial production. Following discussions with the Company's technical management, the Board hasdecided to delay the spudding of the next well of this campaign until theseismic data is re-evaluated using the subsurface information obtained from thenew drilling. The main objective of this review is to improve the understanding of the trapand seal mechanisms in the field, especially the sealing capacity of the faults.Both a seismic re-interpretation and a detailed comparison of the geologicalparameters from all wells will be carried out. The new exploration prospectswill then be grouped according to different geological concepts based on theresults of the review and those with the highest probability of penetrating oil-bearing strata will be recommended for further exploration. The Company expectsthis review to be completed during the first quarter of next year. Production from Well 20 has doubled to 50 barrels of oil per day (bbl/d) whilststill running on the original progressive cavity pump ("PCP"). Total productionfrom Wells 20 and 73 currently stands at approximately 300 bbl/d due to recentinstallation of a PCP at Well 73 to optimise output and there is scope toincrease this rate significantly by increasing speed and capacity of the pumpingequipment and water shut-off operations. Tony Porter, CEO of Victoria Oil & Gas, said today, "We have found oil in allthe wells we have drilled, which shows that the source rock for hydrocarbongeneration is present throughout the field. The challenge now is to concentratefurther evaluations on trap and seal. The licence block covers a large area of65 square kilometres and still has significant potential for futurediscoveries." Porter added, "Activity to maximise production from Wells 73 and 20 is ongoingand both have responded well to pumping. With the right equipment we wouldexpect to see a material increase in production from the current levels". Kevin Foo / George Donne Jonathan Charles / Ed PortmanVictoria Oil & Gas Plc Conduit PR+44 (0)207 921 8820 +44 (0)207 429 6611 +44 (0) 7791 892509Toby Hayward / Oliver GriffithsJefferies International+44 (0)207 618 3500 The information in this release has been reviewed by Gerd Fabel, SPE, who is aqualified person for the purposes of the AIM Guidance Note for Mining, Oil andGas Companies. Mr. Fabel is Head of Exploration at Victoria Oil & Gas Plc andis qualified as a petroleum engineer with over 25 years experience in oil andgas exploration and production. This information is provided by RNS The company news service from the London Stock Exchange