Petroceltic International, in association with its partner Sonatrach, the Algerian National Oil & Gas Company says that:

• The well test on well AT-2, on the Ain Tsila Field, Isarene permit (Blocks 228 & 229a), Algeria, following fracture stimulation ("fracturing") has resulted in gas flow rates in line with expectations, of 4.9 mmscf/d. A discovery declaration has been filed with Sonatrach for this well. • Well AT-2 gas pressures indicate that this well is in the same pressure regime as the gas in AT-1 and that AT-2 therefore represents a successful delineation well to the AT-1 gas condensate discovery. It is probable that the Ain Tsila gas condensate discovery therefore extends at least 12km south from AT-1 to the AT-2 location. • AT-2 also logged 4m of gas bearing sandstone in the Devonian F2 horizon. The Company plans to test this shallower gas-bearing interval, using a workover rig, at a later date. • Drilling on the AT-3 well, 9km to the south of AT-2 has now been completed. The well logged a gas column in the Ordovician reservoir in excess of 80 metres. With testing of the AT-2 well completed, the Company plans to test the AT-3 well. • The rig will now move to drill the INW-2 well in the north west of the block, on the Issaouane NW prospect. This well will target both Devonian and Ordovician reservoir objectives.

Testing and sampling operations at the AT-2 well have now been completed and the well testing crew is now moving to flow test well AT-3. Well AT-2 has been completed for possible future use as a production well.

The AT-2 well is the third well in the current drilling programme on the Isarene permit in the Illizi basin, Algeria, and the fourth well to successfully test gas at potentially commercial rates drilled by Petroceltic since the block was awarded. This successful well test demonstrates the existence of Ordovician gas reservoirs over 12 km from the AT-1 location to the AT-2 location.

Gas flow rates at AT-2 are predominantly from the relatively low porosity and permeability matrix sandstone at this location. The fracture stimulation at AT-2 does not appear to have communicated with any natural open fractures at this location. The large volume of information gathered from the well evaluation programme and the subsequent fracture stimulation will be important in optimising any future development of the Ain Tsila discovery. The AT-2 well was drilled by Petroceltic (75% interest, Operator) in association with the Algerian Oil & Gas Company Sonatrach (25% Interest).

Brian O'Cathain, Chief Executive of Petroceltic, commented, "Well AT-2 has successfully demonstrated that the Ain Tsila structure contains a large volume of gas in place, with pressure continuity demonstrated from AT-1 to AT-2. It also demonstrated that the lower quality Ordovician sandstone encountered at AT-2, with porosities in the range of 5-10% are capable of flowing gas at commercial rates, even in vertical wells. We are now working to integrate well and seismic data, with a view to optimising future development locations on areas of open fractures and / or higher permeability rock. We are pleased to have successfully logged over 80m of Ordovician gas reservoir at AT-3, and look forward to testing that well in the near future. The drilling rig is now moving to drill the Issaouane NW prospect, in the North West part of this prolific block."

Tags: Petroceltic International plc