Rocksource ASA provides the following year-end update and accelerated 2008 year-end production target from its US subsidiaries, Rocksource Energy Corporation and Sandhawk Energy LLC.

Based on recent facility upgrade and increased capacity, Rocksource has accelerated the 2008 year-end target of 2,000 barrels of oil equivalent per day (boepd), where we expect the target to be reached within first quarter 2008.

The current total production is in excess of 1,500 boepd net to Rocksource which compares to the original 2007 year-end target of 1,000 boepd. The 2008 production target will be revised when all wells have been put on production.

The new process facilities and gas gathering system are now completed and pressure tested, checked operationally and tied in to the main export line. This work was performed according to plan and without any HSE incidents. These gas processing facilities have an initial gross capacity of approximately 3,500 boepd, which may be further increased with limited additional investments. All facilities are working well and the sales gas has been tested and is within specification limits.

A total of 7 wells have been drilled and completed in 2007. The 3 wells completed in high pressure zones have been tied in to the new facilities and 2 of the low pressure wells are still producing through the temporary facility. The remaining 2 low pressure wells have been temporarily shut in after testing, but all the low pressure wells will be hooked up to compressors early 2008 to produce through the new facilities.

The latest well drilled, Morian #8, was logged on December 21 and indications are very good that this will be put on production as planned in January.

The final well in the current drilling campaign will be spudded shortly and completed by end January. Results from all wells will then be incorporated in the field reservoir model to ascertain whether further drilling may enhance overall economic results from the Drews Landing Field and New Ace Field.

Tags: Rocksource Group