Offshore staff

CALGARY, Canada --Vital Resources Corp. is talking to Otto Energy regarding drilling its Argao prospect in the Philippines before year-end. Drilling depends on the availability of a seismic vessel and a rig. Argao, otherwise known as SC 51, is believed to contain at least 100 MMboe.

"Having production from both SC 50 (Calauit) and SC 51 (Argao) in early 2008 would put Vital on the map," says Michael Whitehead, president and CEO of Vital Resources.

Vital acquired the exploratory block in SC51, which consists of two sub-blocks over the East Visayan basin. The southern block contains seven identified prospects of which three are drill ready. The combined reserves potential, as estimated by MBA Petroleum Consultants of Australia, is 75-465 MMboe.

The company has made arrangements to take delivery of a multi-purpose semisubmersible rig in late 2007. This will allow Vital to act on detailed well planning and design for drilling the horizontal re-entry of Calauit 1B in SC50. The company believes the Calauit 1B oil field could contain up to 39.5 MMboe, of which 6.44 MMbbl will be recoverable.

In October 2006, Vital shot 400 km (248.5 mi) of 2D seismic data under this program and expects data interpretation to be completed in Q1 2007.

The focus on SC 55 is the Marantao prospect, a carbonate reef buildup interpreted through reprocessed 2D seismic to be potentially five times larger than the Malampaya structure. The Malampaya structure is the Philippines' largest oil and gas field, presently operated by Shell and estimated by the Department of Energy of the Philippines to contain 500-750 MMbbl of oil and 2.5-4.0 tcf of recoverable gas.

Otto Energy originally planned to undertake seismic data acquisition in mid-2007 and to drill the Argao prospect in second half of the year. Further seismic work was planned for mid-2007 and farmout of the giant deepwater Marantao prospects in 2007 as well.

4/26/2007