Shell, Petromanas Find Oil in Albanian Well

November 5, 2013

Petromanas Energy Inc. and Royal Dutch Shell plc ("Shell") on November 4 announced positive test results from Shpirag-2 well in Block 2-3, which covers an area of 3,450 square kilometres onshore south-central Albania.

Testing operations commenced in mid-October following the arrival and rig up of all necessary equipment. Following acid stimulation, the Shpirag-2 well flowed naturally for 24 hours. Following initial clean up and shut-in, the Company conducted an extended, three-day test.

During the extended test, the Shpirag-2 well flowed at rates of 1,500 to 2,200 barrels per day of oil equivalent (boe); 800 to 1,300 barrels per day (bpd) of 35 to 37 degree API oil and 2 to 5 mmcfd of gas through varying choke sizes, at wellhead pressures ranging from 1,700 to over 3,000psi. The gas oil ratio was in the range of 2,500 to 2,800 scf/bbl. Lower than expected levels of hydrogen sulphide were observed (5,000 ppm) and, following the initial test, there was 0% water cut.

"These are compelling results from a well that, due to difficulties encountered while drilling, is not the optimal wellbore into the reservoir," said Mr. Glenn McNamara, CEO of Petromanas.  "These test results initially confirm the well's ability to flow light oil and provide early validation of the potential of Block 2-3 and our considerable investment to date in this asset. Given carbonate reservoirs are dependent on fracture porosity, and well rates can vary significantly across the reservoir, we are very encouraged to have flowing oil at these rates from our first well."

"The results of the Shpirag-2 well are encouraging and support the potential of this oil play in Albania," said Edwin Verdonk, Shell Vice President Exploration Europe. "We look forward to appraisal efforts next year to help us fully assess the volumes and production capability of this reservoir."

Following the three-day test, the well has been shut in for a 30-day period for pressure build-up. Detailed analysis of the test results has started. The first appraisal well is planned at Shpiragu after completion of the Molisht-1 exploration well which is currently drilling.

Shpirag-2 was drilled to a total depth of 5,553 metres, and tested 400 metres of the target carbonate reservoir. Based on the previously drilled Shpirag-1 and the Company's current program at Shpirag-2, Petromanas and Shell believe they have identified in excess of 800m of oil column in fractured carbonate reservoirs at the Shpiragu structure.

Petromanas has a 25% working interest in Block 2-3 and is the operator. Shell holds the remaining 75% working interest.

Source: Petromanas Press Office, 2013