VOG.L Regulatory News (VOG)

17 May 2005 07:01

Victoria Oil & Gas PLC17 May 2005 17 May 2005 Update on the Forward Drill Plan for the West Medvezhye Gas and Condensate Project, Russia • Drilling set to commence June 2005• Advanced 'geoprobe' technology to be used• Preparations for further drilling to begin later this year Following the completion of seismic interpretation and risk assessment ofvarious prospects on the West Medvezhye block, the Board of Victoria hasapproved the recommencement of drilling at the first target site, Well #104 tobegin in June. Drilling at Well 104 Well 104 has previously been drilled to 590 metres and will be continued down toits first target depth of 1,320 metres to test the Cenomanian horizon. Thissandstone horizon is believed to have contained approximately 60 percent of thegas produced in Western Siberia to date and is the main productive interval inGazprom's adjacent, massive Medvezhye and Urengoy fields. The development of Well 104 will involve modern geoprobe technology. A geoprobeis a low cost "slim-hole" well designed for the purposes of collecting moregeological data and information to further refine existing interpretations. Theadvantage of such slim-hole technology, other than its low cost, is that it canbe easily reconfigured into a producing well following any hydrocarbondiscovery. Further Drilling Prospective accumulations are also interpreted to be present in the Neocomian,Jurassic and Apitan sequences located in the northeast, central and southernparts of the block. The Board has approved preparations to begin this year fortwo additional wells to meet licence obligations, requiring three wells to bedrilled on the block by late May 2006. Although the final decision has not yet been made as to the target locations,early indications point to likely well-sites targeting the Jurassic horizonlocated at depths up to 3,400 metres in the central part of the block and theApitan horizon at depths to 3,800 metres in the southern part of the block. Victoria expects mobilisation will begin for the Jurassic well in November thisyear using a larger rig than is currently located at the site of well 104.Another rig will be obtained in December 2005 for the commencement of drillingthe Apitan target in January 2006 in order to meet the minimum work programcommitment. Negotiations with Gazprom Initiated Initial negotiations with the Nadym branch of Gazprom for access to their gasgathering and transmission system have been positive. Following a commercialdiscovery at West Medvezhye, Victoria will look to access the gas transmissionsystem with gas condensate likely to be shipped by road or rail and solddomestically. Condensate, a very light form of crude oil and is a premiumproduct and is used to improve the quality of heavy Urals crude. Commenting today Executive Director William Kelleher said, "Drilling of the WestMed project is on course to commence in a matter of weeks and as you can imaginewe are very excited. Our analysis has been thorough and whilst we cannotdownplay the risks that still exist it is now time to start the next phase ofoperations. "Victoria is focused on developing a hydrocarbon resource in the mostprospective region for gas and gas condensate in the world. We shall be relayingall results to our shareholders as they come through." For further information please contact: Kevin Foo / George Donne Jamie Cumming / Tracy Mackenzie Victoria Oil & Gas Plc Bell Lawrie +44 (0)207 921 8820 +44 (0)141 314 8103 +44 (0)141 314 8220 Leesa Peters/ Laurence Read Conduit PR +44 (0)207 618 8760 +44 (0)7979 955 923 This information is provided by RNS The company news service from the London Stock Exchange