31st-v4

Corallian Energy Limited, the licence administrator, together with its partners, Andalas, UOG Colter, Baron Oil and Corfe Energy have been offered Blocks 98/11b and 98/12 in the English Channel.

Andalas has earnt the right to an 8% interest in the blocks through its Farm-In agreement with Corallian.

The blocks are contiguous with acreage currently held by the P1918 Joint Venture (Block 98/11a containing the Colter South discovery in which Andalas has an 8% interest); PEDL330 and PEDL345. Andalas participates via its wholly owned subsidiary, Resolute Oil and Gas Limited.

Block 98/12 contains the eastern portion of the Colter South discovery, a rotated fault block with Sherwood Sandstone reservoir which was drilled in a downdip position by well 98/11-1 in 1983, and recently confirmed as a discovery by the Corallian operated 98/11a-6 Colter appraisal well. This well encountered 9 metres of gross oil pay in Sherwood Sandstone and the prospect contains an estimated mean recoverable volume of 15mmbbls prospective resource, 30% of which is located on Block 98/12. Block 98/12 also contains the Ballard Point East Prospect which is a structural high mapped at Penarth level, along strike from the Ballard Point discovery. The prospective reservoir is Sherwood Sandstone.

Block 98/11b contains the Ballard Point discovery which was drilled by Gas Council Exploration in 1984. Well 98/11-2 flowed 9.6 million standard cubic feet of gas per day with 170 barrels of 45oAPI condensate from Triassic Sherwood Sandstone. The appraisal well 98/11-4,4Z drilled in 1987 tested oil at low rates (c.180 bopd equivalent) from just above the oil-water contact in the Sherwood, and gas at low rates (25,000 – 50,000 scfg/d) also from the Sherwood. This well appears to share the same fluid contacts as 98/11-2.

Block 98/11b also contains the offshore portion of the Purbeck Prospect which comprises the Purbeck anticline, the northern flank of which anticline was drilled by the BP Southard Quarry well in 1989. This well encountered hydrocarbon columns in the Cornbrash similar to those encountered at the recently drilled 98/11a-6Z sidetrack, and in the Lower Jurassic Bridport and Triassic Sherwood Sandstones. The hydrocarbon phase is uncertain due to mud losses while drilling. The southern flank of the anticline contains a bright amplitude anomaly at Bridport Sand level.

In the southern portion of 98/11b and 98/12 three leads have also been identified on sparse 2D seismic data, south of the main inversion zone. These leads have targets at both Bridport and Sherwood levels.

Within Phase A of the Innovate licence the joint venture must make a decision to enter into Phase B for new seismic acquisition or drill or drop the licence within 3 years.