Valkyries to drill offshore Caspian Lagansky well

Valkyries Petroleum Corp. is preparing to drill its first exploration well on the Lagansky block adjacent and directly on trend with Lukoil's recently announced major discovery.

Offshore staff

(Russia & Capsian Sea) - Valkyries Petroleum Corp. is preparing to drill its first exploration well on the Lagansky block, located in the Russian sector of the Caspian Sea.

New 2D seismic has been acquired which confirms several drillable prospects on the block.

The company is currently converting a set of shallow draft barges for the drilling operations.

Valkyries expects to spud its first well at the end of the 2Q 2006, targeting the large Morskoye prospect, located in approximately 2 m of water offshore.

Drilling will target three main Cretaceous and Jurassic reservoirs with depths ranging from 800 to 1,600 m.

The Lagansky block encompasses over 2,000 sq km and is located immediately adjacent to and directly on trend with Lukoil's recently announced major new oil discovery -- considered one of the largest new discoveries in Russia over the past 10 years.

The discovery well on Lukoil's new field, which has been renamed V. Filanovsky (formerly Rakushechnoye), was reported in a Lukoil news release dated January 25 to flow at a rate of 800 tons per day (approximately 6,240 b/d) of ultra-light (44°ree API), water-free, low-sulfur oil.

1/31/06


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