Results of the re-completion

6 December 2010 - Exillon Energy plc is pleased to announce the results of the successful re-completion of Appraisal Well 1 (10290) on the EWS III field and Appraisal Well 2 (10285) on the EWS II field.

Appraisal Well 1 (10290)

Appraisal Well 1 (10290) is located on the North-Eastern margin of the EWS III field. The well was originally drilled in March 2002, and was suspended February 2003.

After reinterpretation of 2D seismic data, and cross-section analysis of the wells drilled on the EWS II and EWS III fields, a new reservoir model was constructed that suggested interconnection between the EWS II and EWS III fields. In November 2010 the Group decided to re-test Appraisal Well 1 (10290) in order to test this hypothesis.

The Group reopened the well and after significant well workover, running of multiple logs and tests, and the application of hydraulic fracturing, the following key results were achieved:

1) Oil was successfully flowed from the same interval and the same formation as wells on the EWS II field. The oil had a viscosity of 21.5 cSt (versus 21.9 cSt on the EWS II field) and a density of 847 kg/m3 (versus 861 kg/m3 on the EWS II field).

2) Wire line logging indicates the presence of 12.4 m of net oil pay within the J2-3 horizon, which represents more than a 2.5 fold increase from the previous estimate.

3) A stabilized production rate of 246 bbl/day of water-free oil was recorded, which represents more than a 20 fold increase over the original flow rate achieved for this well.

These results have a number of positive inferences:

1) The oil quality similarity between EWS II and EWS III fields, together with a thicker net pay on the margin of the EWS III field, supports the Groups assertion that the boundaries of EWS III field are likely to extend further to the north and connect with the EWS II field.

2) The commercial flow rate achieved from Appraisal Well 1 (10290) combined with the increased net pay should result in an increase in both the oil in place as well as the recovery factor of the area around Appraisal Well 1 (10290).

3) The success of the hydro-fracking programme demonstrates that there is a significant production upside potential from this procedure on the Exillon WS oil fields. Coming at a cost of just USD 180,000 per well, hydro-fracking may result in both an increased recovery rate and a shift of non-commercial reserves to commercial categories.

Appraisal Well 2 (10285)

Appraisal Well 2 (10285) is located on the far South-East margin of the EWS II field. The well was originally drilled in July 1996, and was suspended in February 2002.

The Group reopened the well and after significant well workover and the application of hydraulic fracturing, the following key results were achieved:

1) A preliminary production rate of 86 bbl/day of water-free oil was recorded.

2) Wire line logging indicates the presence of up to 5 m of net oil pay within the J2-3 horizon.

These results have a number of positive inferences:

1) The commercial flow rate achieved from Appraisal Well 2 (10285) may increase the recovery factor of the area as the well is located on the very margin of the field.

2) Thicker net pay indicates potential for widening of the field in the South-East direction.

Exillon Energy COO Yury Ovcharov said: "We are extremely pleased with these results which could represent a significant increase in the areal extent of the hydrocarbon deposits in the EWS II and EWS III area, and supports our assertion that these fields may be viewed as a single large accumulation."

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