* WELL 210 HITS OIL - CONFIRMS CONNECTION OF ZL AND LL OIL FIELDS
* PRODUCTION TARGETS FOR MAY AND JUNE TWO MONTHS DELAYED, YEAR-END
TARGET REMAINS
The first phase of the drilling of well 210, located between
Zapadno-Luginetskoye (ZL) and Lower Luginetskoye (LL) oil fields,
is now completed and has struck oil. This is very positive and
finally confirms the thesis that the ZL and LL oil fields are
connected into one large oil deposit.
The short-term production targets are delayed two months due to
current limitations in the oil treatment and delivery capacity.
Year-end target 2008 of 8,000 barrels per day remains."The results from the initial phase of the drilling of borehole 210
are very positive and will of course also have a positive effect on
coming reserve estimations. We are now confident that the ZL and LL
fields are connected into one large oil field" says Fredrik
Svinhufvud, CEO of Malka Oil AB, and continues:"The production delay is not according to plan and once again
shows the importance of having our own complete oil treatment and
delivery facilities in place. We have experienced problems with
removing water from the oil flows after hydro-fracturing and have
not been able to treat the oil as fast as needed and therefore we
have been forced to temporary limit the production. This however
will be resolved step by step until we at the end of the year will
have our own infrastructure for oil treatment and delivery
including a direct connection into Transneft".
Borehole 210
Initial results from borehole 210 (see map below) show a 9 meter
thick oil saturated zone in the upper Jurassic layers and these
results confirm the connection of the Zapadno-Luginetskoye and
Lower Luginetskoye oil fields. The next step is to continue the
drilling through Jura 10 and down to Paleozoic.
Delay of production targets
The production targets of 4,500 and 6,000 barrels per day are moved
forward two months due to capacity problems in conjunction with the
water removal after hydro-fracturing. Oil production is expected to
reach 4,500 barrels per day before the end of July and up to 6,000
barrels per day by the end of August. The year-end target of 8,000
barrels per day remains.
For further information, please contact:
Fredrik Svinhufvud, Managing Director Malka Oil, tel +46 8 5000
7811, mobile +46 708 708 708
Richard Tejme, CFO, tel +46 8 5000 7812 mobile +46 707 31 52 17
For further information on Malka Oil AB, see the website
www.malkaoil.se
Malka Oil AB (publ) is an independent oil and gas production
company operating in the Tomsk region in western Siberia. Their
current position consists of oil and gas assets for license block
number 87 in the said region. The block has a surface of 1,800
square kilometres. There are currently three oil fields at the
license block, namely Zapadno-Luginetskoye ("ZL"), Lower
Luginetskoye ("LL") and the Schinginskoye oil field, and a large
quantity of other not yet drilled oil structures. The ZL and LL oil
fields are in production and these two oil fields field have also
went through reserve classification by the Russian State Committee
of Reserves (GKZ). A considerable drilling programme was carried
out in 2007. The GKZ registered extractable oil and condensate
reserves in the categories C1 and C2 amounted to 97 million barrels
at the end of 2007. The company's own estimate of its extractable
oil and condensate reserves in the three existing oil fields on
license block number 87 is currently 140-190 million barrels.
Malka Oil's license block is surrounded by a large number of
producing oil and gas fields.
Reasonable caution notice: The statement and assumptions made in
the company's information regarding Malka Oil AB's ("Malka")
current plans, prognoses, strategies, concepts and other statements
that are not historical facts are estimations or "forward looking
statements" concerning Malka's future activities. Such future
estimations comprise but are not limited to statements that include
words such as "may occur", "concerning", "plans", "expects","estimates", "believes", "evaluates", "prognosticates" or similar
expressions. Such expressions reflect the management of Malka's
expectations and assumptions made on the basis of information
available at that time. These statements and assumptions are
subject to a large number of risks and uncertainties. These, in
their turn, comprise but are not limited to i) changes in the
financial, legal and political environment of the countries in
which Malka conducts business, ii) changes in the available
geological information concerning the company's projects in
operation, iii) Malka's capacity to continuously guarantee
sufficient financing to perform their activities as a "going
concern", iv) the success of all participants in the group, or of
the various interested companies, joint ventures or secondary
alliances, v) changes in currency exchange rates, in particular
those relating to the RUR/USD rate. Due to the background of the
many risks and uncertainties that exist for any oil-prospecting
venture and oil production company in its initial stage, Malka's
actual future development may significantly deviate from that
indicated in the company's informative statements. Malka assumes no
implicit liability to immediately update any such future
evaluations.
