Sea Dragon Energy Inc. is pleased to announce the following operational update for its recent work program in Egypt.

NW GEMSA CONCESSION
The NW Gemsa concession is located onshore on the west side of the Gulf of Suez, some 300 km southeast of Cairo. Two main oil fields are producing light oil, the Al Amir SE field along with the Al Ola extension to the south and the Geyad field to the north.

Current production from the Al Amir SE and Geyad fields is approximately 9,555 bopd gross (955 bopd net to Sea Dragon). Currently producing wells include eight at Al Amir SE field, two at Al Ola and four at Geyad. Cumulative production from the NW Gemsa Concession has now exceeded 9.82 million barrels of 42 degree API Crude oil.

Water injection is ongoing with three injectors currently operating at Al Amir SE Field and one injector at Geyad Field. Current total injection rates are approximately 18,000 barrels per day. Cumulative injection to date is 5.87 million barrels at Al Amir SE and 1.21 million barrels at Geyad.
Sea Dragon has a 10% working interest in the NW Gemsa Concession with Vegas at 50%, as operator and Circle Oil PLC with 40%.

Al Amir SE-13 Well:
This well reached total drilling depth on November 7 at 10,350 feet. Log analysis indicates 20 feet of Shagar net pay with 12% porosity and low water saturation. The Shagar zone was perforated from 9,895-9,908 feet. Initial testing resulted in an oil rate of 1,280 bbl/d on 26/64” choke. The well began production on November 25 and is currently producing 743 bopd on a 22/64” choke setting.

Al Amir SE-14 Well:
This development well was spud on November 26 with the objective of appraising the Shagar and Rahmi reservoirs between the Al Ola-1x and AASE-12ST wells. Planned total depth is 9,950 ft. The well is currently drilling at 1,780 ft.

Al Ola-3 Completion:
This water injection well was dually completed in the Rahmi and Shagar sands. The well was perforated in the intervals: 10,232-10,252 feet and 10,164-10,182 feet. A final completion string was successfully run. Water injection will commence after start up of the associated water source wells.

Al Amir SE-7 Injector Work Over:
This well was successfully recompleted as a dual zone injector in the Rahmi and Shagar intervals. Injection resumed on November 4. Current injection rates are approximately 1,200 bwpd in the Rahmi and 2,300 bwpd in the Shagar.

Geyad-1 Work Over:
In October 2012 this oil producer was re-completed in both the Rahmi and Shagar sands. Both intervals were re-perforated and a new completion string was run to allow commingled production. Cumulative oil production to date from the well is 764,000 bbl. This well is producing intermittently. Downhole plugging through sand fill is under investigation.

Geyad-2ST Work Over:
Operations were conducted to recomplete this well as a Rahmi zone producer. The Shagar interval, which watered out in 2011, was successfully cement squeezed and the Rahmi perforated in the interval 6,565-6,595 feet. Initial testing resulted in 407 bbl/d of oil on a 2 inch choke. The well is currently shut-in for a 2 day build-up period, after which the service rig will be moved and the well placed back on production.

Future Plans:
Beyond the drilling of Al Amir SE-14, future plans at NW Gemsa include the drilling of 3 additional water injectors and 1 producer, after which the rig is expected to be farmed out.

The gas conservation project is moving along well as sales gas and incremental liquids production are expected to commence in February 2013. The project is expected to add approximately 8.2 MMcf/d of gas sales and additional associated liquids of 500 bbl/d. Total gross production for 2013 is expected to average 10,000 boe/d (1,000 boe/d net to Sea Dragon).

KOM OMBO CONCESSION
The Kom Ombo Concession is located onshore in the southern part of Egypt some 1,000 km south of Cairo. It contains the Al Baraka oilfield, producing light oil from multiple reservoirs and an exploration area of 11,400 km².

Current production from the Al Baraka field is averaging approximately 515 bopd gross (257 bopd net to Sea Dragon).

Sea Dragon has a 50% working interest and is a joint operator of the Kom Ombo Concession with Dana Gas owning the remaining 50%.

Press Release