ZOL.L Regulatory News (ZOL)

4 May 2006 16:02

Crosby Capital Partners Inc04 May 2006 4 May 2006 Crosby Capital Partners Inc. ("Crosby" or the "Company") IB Daiwa Issues Update on Oil and Gas Exploration Shareholders should be aware that IB Daiwa Corporation has today issued the following press release relating to its ongoing drilling programme at Big Mouth Bayou. IMPORTANT UPDATE ON THE OIL AND GAS EXPLORATION ACTIVITIES OF IB DAIWA'S SUBSIDIARY, LODORE RESOURCES INC. Drilling at Big Mouth Bayou Evidenced Gas bearing sands at 15,100ft and15,400ft, currently casing at 16,200ft prior to drilling ahead to main targets. IB Daiwa is pleased to provide shareholders with an update on the progress of anexploration well which is currently being drilled in Louisiana, which isreferred to as the "Big Mouth Bayou" well and through which its subsidiary,Lodore Resources Inc. ("Lodore") the group will earn a 40% interest in anydevelopment and production that may result (a 35% interest will be owned byConiston International Capital Limited, a wholly owned subsidiary of TechpacificCapital, with the balance of the 25% owned by Pel-Tex Oil Company L.L.C., theoperator of the well). This well is being drilled with the objective of reachingtwo main targets at approximately 17,000ft and 19,000ft respectively. The wellhas not yet reached these target depths. Over the past few days the decision was made by the operator of the well,Pel-Tex Oil Company L.L.C., to temporarily suspend drilling, having reached adepth of 16,200ft, in order to evaluate the status of the well below 14,664ft,which was the last casing point. Based on information that had been acquiredduring the drilling process (which employed Logging While Drilling technology),and a conventional wireline log, two gas bearing sands have been identified inthe section evaluated. The combined thickness of the two gas bearing sands is48ft (16 metres). The area covered by the Big Mouth Bayou leases is extensive,and an accurate estimate of the size of the reserves contained in this reservoirwill not be possible until mapping has been completed, and a more thorough flowtests have been conducted. Following the completion of wireline logging and analysis of the results it hasbeen decided to set a further string of casing down to 16,200ft prior torecommencing drilling towards the two main targets. Given the evident quality sands and the high pressure in these reservoirs, it isexpected that they could flow gas at economic rates should it be decided tobring either or both of these reservoirs into production. However it should benoted that Big Mouth Bayou was not drilled in order to discover these or otheroil and gas sands at levels shallower than approximately 17,000ft, which is theanticipated depth to the top of the first of the main targets that are describedin more detail below. As mentioned above, further evaluation of these shallower gas discoveries willbe undertaken in due course to provide an estimate of their potential size, andalso to enable reserves to be confirmed by an independent reserve auditor. Inthe meantime the focus of the Pel-Tex joint venture is on drilling ahead to themain target sands. Consequently, a decision on whether to attempt to produce gasfrom the sands discovered in the past few days will not be made until the wellhas been drilled to completion and all potential gas productive zones have beenthoroughly analysed. It is currently expected that operations to run and set casing will be completedwithin the next 2 weeks, after which the well will re-commence drilling. ABOUT BIG MOUTH BAYOU The Big Mouth Bayou prospect is one of a complex of large exploration prospectssituated onshore in Cameron Parish, south-western Louisiana covering an area ofapproximately 4,500 acres. Pre-drill gross unrisked mean reserves of 754 bcfemean that Big Mouth Bayou has the potential to be one of the largest onshorediscoveries in the region in recent years. More specifically, the Big Mouth Bayou well is targeting 2 stacked andcompletely independent reservoirs of almost equal potential size; increasing thelikelihood of a significant discovery being made. The Big Mouth Bayou well hasalready delivered some very positive results with an unexpected discovery of oilsands at approximately 7,100ft, in addition to the potentially productive gassands described in this announcement. END Crosby holds 24.08% of the issued share capital of IB Daiwa (via two whollyowned subsidiaries of the Company). For further information please contact Simon Fry Tel: +44 207 590 2800 orCara Kiewel Tel: +44 207 590 2808 This information is provided by RNS The company news service from the London Stock Exchange