ZAAB ENERGY AG
ZAAB Energy AG makes discovery of oil and gas in the South-Yermolinskiy block and further increases works in the Vyselkovsko-Kubanskiy and Maryinskiy blocks
ZAAB ENERGY AG / Miscellaneous Release of a Corporate News, transmitted by DGAP - a company of EquityStory AG. The issuer / publisher is solely responsible for the content of this announcement. ---------------------------------------------------------------------- Munich, 17 January 2008. After several days of gas inflows ZAAB Invest is able to apply for a confirmation of a commercial discovery of gas in the South Yermolinskiy block in the Cretaceous horizon at a depth of 2,200 meters. The total amount of recoverable gas reserves confirmed by drilling and production is according to the company’s estimates approximately 600,000 million cubic meters (4.4 million barrels) of oil equivalent which is an increase compared to the 3 million barrels of oil equivalent which had been estimated for this horizon so far. In order to confirm this discovery as a commercial discovery and proved reserves under Russian law it is now required to submit an application to the Central State Reserves Commission which will have to confirm the proposed reserves amount. It is expected that this procedure will take several months. Professor Gennadiy Shilov, the chief geologist of ZAAB Invest, commented: 'The discovery of gas at the South-Yermolinskiy field confirms the success of our drilling works at this field. The gas can be marketed via Russian marketing companies and we will do this as soon as we have confirmed additional gas reserves.' The second main target for ZAAB Invest’s work at the South-Yermolinskiy block is to explore further the oil resources at the Paleazoic level (at approximately 2,900 meters). During the testing period mud with a clear oil film was received. Moreover the geochemical tests of core samples taken during drilling, which were made by the oil service company Lukoil Volgograd NIPI Neft, confirmed the presence of parafinaceous oil in this horizon. ZAAB Invest believe, therefore, to be close to a commercial oil discovery at the Paleazoic level. It should be noted that in an independent resource report prepared in 2006 gas resources had been estimated at the Paleazoic level whereas the presence of oil could now be confirmed by drilling. The oil resources are now estimated at 12.5 million barrels (which is the same amount estimated in the independent resource report prepared in 2006). Furthermore, ZAAB Invest was able to confirm oil at a depth of 2,620 meters by way of open hole geophysical (but not yet geochemical) testing. ZAAB Invest estimates the amount of recoverable oil to be 5.7 million barrels. Thus, the total resources of the South Yermolinskiy block currently estimated by ZAAB Invest clearly exceed the previously published estimates. Work in the Vyselkovsko-Kubanskiy block ZAAB Invest will now focus its activities also on the Vyselkovsko-Kubanskiy block. A Rosneft service subsidiary, Rosneft NTC, is finalizing the plans for drilling the first well. The well will have a depth of 1,700 meters only. Based on the current state of development it is expected that drilling can be taken up in the second quarter of 2008. The drilling works themselves are expected to take up to two months. The Vyselkovsko-Kubanskiy block is the largest block in the ZAAB Invest license portfolio and the targeted horizon at 1,700 meters is expected to hold 10 billion cubic meters (approximaterly 70 million barrels of oil equivalent) of gas. Work in other pre-production fields The Maryinskiy block is also expected to be close to production. Oil had already been discovered and produced previously. After completion of the preparatory work and receipt of approvals from the environmental and other governmental regulators, ZAAB Invest will drill a new well to produce from this field. Drilling will have to be done up to a depth of approximately 3,800 meters and is expected to take several months. Geological work in other blocks owned by ZAAB Invest The independent oil service company 'Stavropolneftegeophysica' interpreted 200 line kilometers of 2D seismics on the Yevseevskiy block. On this basis the drilling of a prospecting well in the Yevseevskiy block can now be planned. In addition, the independent oil service company 'Krasnodarneftegeophysica' finalized the planning of seismic works for 250 line kilometers on the Rudevskiy block. The works have been carried out from December 2007 and are expected to take until March 2008. In the Maryinskiy block ZAAB Invest is not only preparing the drilling of a new well as described above but also continuing its general geological work. The service company 'Stavropolneftegeophysica' is currently reinterpreting logging data of several existing, but shut-in production wells located on the territory of the Maryinskiy block. Simultaneously, in January 2008 two dimensional ('2D') seismic works of a total of 50 line kilometers have been started. General information about ZAAB Energy AG ZAAB Energy AG is a Munich based independent oil and gas exploration and pre-production company which expects to start up its oil production in the near future. ZAAB Energy’s Russian subsidiary ZAAB Invest holds a license portfolio to five areas located in the Russian Federation between Black and Caspian Sea with significant oil and gas resources. Board of directors Forward looking statements This news release is based on partly forward looking statements i.a. on planned drillings and expansion drillings, as well as associated costs and estimates of oil and gas production, cash flows and other factors. All statements such as planned, estimated, expected, potential etc. are of a forward looking nature. Although ZAAB Energy AG is of the opinion that the forward looking statements are plausible, they comprise risks and uncertainties in a way that the occurrence of the assumed results may not be warranted. Important factors that may lead to deviations between the actual results and the forward looking statements are e.g. issues of a technical or mechanical nature or geological issues, which may lead to the result that a commercial recovery of the reserves or resources is not possible. In addition, prices may have an important impact on profitability. No offer to sell shares This document represents neither an offer to sell shares of ZAAB Energy AG ('the Company') nor an invitation to make an offer to purchase shares of the Company. This document and the information contained therein may not be brought into or transmitted to the United States of America or distributed or transmitted to American persons (including legal entities as defined in Regulation S of the United States Securities Act of 1933, as amended - the 'Securities Act') or to publications with a general circulation in the United States of America. Each violation of such limitations may constitute a violation of applicable securities laws. The shares of the Company have not been, and will not be, registered under the Securities Act, or with any securities regulatory authority of any state or other jurisdiction of the United States, and may not be offered or sold within the United States or to, or for the account or benefit of any US person (as defined in Regulation S under the Securities Act) except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. There shall be no sale of shares in the Company in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to qualification under securities laws of such state or jurisdiction. Jan-Hendrik Röver, Member of the Board, tel.: +49 89 242 246 910 17.01.2008 Financial News transmitted by DGAP ----------------------------------------------------------------------
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