Niko discovers gas off Orissa in India

Niko Resources Ltd. has discovered gas in the NEC 25 block located in the Mahanadi basin, off the Orissa coast in the Bay of Bengal.

Offshore staff

CALGARY, Canada -- Niko Resources Ltd. has discovered gas in the NEC 25 block located in the Mahanadi basin, off the Orissa coast in the Bay of Bengal.

This shallow water block covering 10,775 sq km (4,160 sq mi) in water depths ranging between 20 and 600 m (66 and 1,968 ft) was awarded under the bidding round of NELP I. Niko holds a 10% interest in the block.

This is the eighth discovery in the block. Development plans have been submitted to the Directorate General of Hydrocarbons for approval.

The well NEC 25-J1 was drilled on the southern portion of the area covered by the 2007 3D seismic survey aimed at exploring upper Miocene slope sands in the deeper part of the block. This well was drilled at a water depth of 478 m (1,568 ft) to the target depth of 2,926 m (9,600 ft). For the first time in this basin, the well encountered high quality multi-darcy gas-bearing reservoir sands in the interval 2,484-2,495.5 m (8,150-8,187 ft).

J1 is part of an ongoing exploration program in NEC 25. Two rigs are drilling exploration wells B3 and A9A. Upon completion of these wells, additional prospects are scheduled to be drilled. Well results are being integrated into the evaluation of NEC 25 and future drilling locations are being assessed.

02/28/2008

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