VOG.L Regulatory News (VOG)

19 Jul 2007 10:30

Victoria Oil & Gas PLC19 July 2007 Aim Release19 July 2007 Victoria Oil & Gas Plc Operational Update at Kemerkol Oil Project, Kazakhstan • Approval of test production project granted by Kazakh authorities• Well 62 drilling completed• Drilling commence at new target, Well 72 Victoria Oil & Gas Plc ("Victoria" or "the Company"), (AIM:VOG), the oil and gascompany focused on the Former Soviet Union, today announces an update on thedevelopment of its wholly owned Kemerkol oil project in the Atyrau Oblast ofKazakhstan. The Company's test production project for the proven reservoir in the westernsection of the Kemerkol licence area has been approved by the Kazakh Ministry ofEnergy and Natural Resources. This will extend the permitted production periodfrom three months to three years for all wells drilled in this area, whichcurrently includes Wells 20, 72 and 73. Although, the marketing of all oil is still limited to the domestic market, theproject also allows the Company to process its production before sale. Thisprocessing can increase the sale price by 10 - 15% and the majority of surfaceinfrastructure is already in place. The project will also permit production to recommence at Well 20, which was shutin to allow for work-over operations. The reactivation of this well will becoordinated with a feasibility study for the conversion of Well 45, alsocurrently shut in, into a water re-injection well. On the previously untested eastern section of the licence area drilling has beencompleted at Well 62 and hydrocarbons were encountered at a depth between 367 -370 metres. The interval will be completed and perforated for testing purposes,but the Company does not expect to encounter commercially viable volumes ofhydrocarbons. The Company's mid-year production therefore, exclusive of affectsof the testing programme at Well 73, was 450 barrels of oil per day slightlyless than its target of 500 barrels. The next target, Well 72, has been spudded and completion is expected in thenext 4 - 6 weeks. This well is located 300 metres north of Well 73 and willfurther appraise the proven reservoir in the western section of the licence. Tony Porter, CEO of Victoria Oil & Gas, said today, "The approval of our testproduction project for the western section of Kemerkol will lengthen thepermitted sales period for our production and allow us to add significant valuethrough in-house processing. As such, this is an important intermediary stepbefore we can upgrade Kemerkol to a full production and export licence. Porter added, "We will continue to pursue our goal of increasing reservesthrough exploration of promising targets in the eastern part of the licenceblock. Through Well 72 we aim to increase the yield from the proven structure inthe west and bolster our cash flow, but we shall then return our attention tofurther exploration." For further information please contact:Kevin Foo / George Donne Ed Portman / Charlie GellerVictoria Oil & Gas Plc Conduit PR+44 (0)207 921 8820 +44 (0)207 429 6666 +44 (0) 7733 363 501Toby Hayward/Jack PrydeJefferies 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