Apache Khalda Corporation LDC ('Apache'), the Company's joint venture partner in the East Ras Budran concession in Egypt, acquired a 3D seismic survey in early 2007.  In addition, three exploration wells have been drilled on the concession.  The first of these, ERB-A-1X, was spudded in June 2007.  This well reached its target depth (11,921 feet TVD) in the Darat Limestone and was flow tested for a 12 hour period and produced at an average rate of 1,901 bopd. Well site estimates of an average flow rate of 1,910 bopd and oil gravity of approximately 17 degree API have subsequently been confirmed by the operator as 1,901 bopd and 16-16.2 degree API respectively.  This well was tied back and became operational in June 2008.

The second exploration well, ERB-B-1X, was drilled using the same rig, to explore potential reservoirs in a different part of the concession.  The well was drilled to a total depth of 5,146 feet into basement, several zones in the well had oil shows and the well was subsequently tested without a productive flow of oil being achieved. The well was plugged and abandoned. A third exploration well, ERB-B-2X was spudded in February 2008 and on completion was tested but did not produce any hydrocarbons on test and was subsequently plugged and abandoned.

We look forward to reaping the benefits from the recent production tie-in of the ERB-A-1X discovery as well as executing a challenging further work and exploration programme with our partner Apache.