Matra Petroleum has made an oil discovery at Arkhangelovskoe-12, the Company’s first exploration well in Russia, adding to the Company’s two discoveries in Hungary, announced earlier this year. The well reached a total depth of 3890m and has now been logged.

The discovery well in Russia, in which Matra has a 100% interest, was drilled to test the Sokolovskaya structure and flowed light (37 deg API) oil at a rate of 960 bopd during an open hole test of the Upper Devonian Aphonenski (Primary Target) formation over the interval 3699-3713m. Initial test interpretation indicates a high level of formation damage caused during drilling and the well may be capable of a significantly higher flow rate if the damage is removed using a suitable acid treatment.

Wireline logging of the well indicates a net pay of 4 - 7m within the tested interval and a possible further 5m oil zone in the Franski formation 3590-3595m (untested). The well will now be cased and completed for production. Completion equipment is currently being sourced locally to allow the completion using the current drilling rig. In the event that all required equipment cannot be sourced immediately then the well will be completed using a workover rig within the next few weeks.

The Arkhangelovskoe license is near to the city of Orenburg with ready access to oil transportation infrastructure and it is expected that the well can be put on production within a month of being completed utilising a temporary leased production facility and trucking the oil to a nearby rail terminal.

Matra has a four well drilling commitment on the license and the drilling rig will be moved to the second exploration well location Arkhangelovskoe-11 to test the Laptevskaya structure. The well will be drilled to a total depth of 3,850m and will take approximately 120 days.

The Aphonenski in Arkhangelovskoe-12 formation was encountered deeper than prognosed and the data obtained during drilling will be incorporated into the mapping prior to drilling the next well on the discovery. The remapping should be completed within a month and may be used as the basis of a revised resource estimate. This well will therefore most likely commence drilling early in 2008.

Peter Hind, Matra’s Managing Director said, “This is a great result for our first well in Russia and on this license and continues on from our recent success in Hungary. The test rate is well above the economic threshold for this area and we hope that we may be able to improve it after completion. There is less pay at this location and it’s a little deeper than we predicted before drilling and therefore reserves are likely to be less than the pre-drill most likely case of 32 million barrels. However, the 5m zone indicated by logs in the Franski provides additional potential. The Arkhangelovskoe license area is highly prospective and we hope to add further discoveries during 2008. Being able to establish long term test production for up to nine months whilst we apply to convert the discovery area into a long term production license is also of great help both technically and financially.”