AWE reported that as at 0600 hours Yemen time on October 20, 2010 (-8 hours EDST) the Al Measar-2 appraisal well in Block 7, Yemen, was drilling ahead in 17-1/2" hole within the Harshiyat Formation at a measured depth of 1,111 meters. Progress for the week was 854 meters.

Al Meashar-2 is the first appraisal well of the Al Meashar-1 oil discovery, which was drilled in early 2010. The discovery encountered oil in the fracture basement; however oil flow rates were limited due to potential reservoir damage which was incurred while drilling.

The appraisal well will be drilled from the existing Al Meashar-1 well pad and deviated parallel to the discovery well. The well is planned to be drilled using Managed Pressure Drilling, which is designed to minimize damage from drilling fluids in the reservoir. The well will be drilled to a planned total measured depth of 3,740 meters.

The participants in Block 7 are:

•ARC Energy Holdings Ltd (subsidiary of AWE) 21.25% •Oil Search (ROY) Ltd (Operator) 34.00% •Kuwait Foreign Petroleum Exploration Co. (Aden) Ltd 21.25% •Yemen General Corporation for Oil and Gas 15.00% •Mitsui E & P Middle East B.V 8.50%

Tags: AWE Limited