Sea Dragon Energy Inc. is pleased to provide the following update on its Operations in Egypt.

NW Gemsa Concession

The AL Ola X-1 well was drilled to its total depth of 14,323 feet in the Nukhul Formation. Open hole logs were successfully run and the well was cased to total depth. The Lower Rudeis Formation where strong gas shows were experienced was perforated and is currently being tested. The same formation was found to be hydrocarbon bearing in the Al Amir SE#6 well located some 4km away from the Al Ola X-1 well. The shallower Kareem oil producing Formation was successfully encountered with 25 ft of oil pay. Once testing operations in the Lower Rudeis Formation are finalized, the well will be completed in the Kareem Formation. 

Production from the AL Amir, AL Amir SE and Geyad fields in the NW Gemsa Concession is holding steady at 9000-9500bopd. Water flooding operations are now planned for the Al Amir SE and Geyad fields to provide pressure support and significant production increases. Cummulative production from the concession has now reached 3.6million barrels of 41 degree API oil.

Sea Dragon has a 10% working interest in the NW Gemsa Concession with Vegas Oil at 50% as operator and Circle Oil Plc. with 40%.

Kom Ombo Concession

AL Baraka SE Well: This step out well was spud on September 15th.  The well is located some 4km southeast of the Al Baraka #9 well and is intended to delineate the limit of the Al Baraka field and test the prospectivity of the deep Kom Ombo oil bearing Formation. The well was drilled to its total depth of 8750ft., open hole logs were run and the well was cased. Preliminary analysis of the logs indicate a gross oil pay section of 46 feet in the Kom Ombo “A” and “C” Formations. Completion and testing operations will follow in early November using the Completion Rig. 

Al Baraka #9 Well: The Six Hills”E” sands where minor oil saturations were observed was tested and non-commercial quantities of oil recovered. Additional potential exists in this well primarily in the shallower Abu Ballas and Sabaia Formations where Petrophysical analysis indicates some 50ft. of potential oil pay. 

Al Baraka #5 Well: Recompletion operations were carried out on this well to isolate a bottom set of perforations suspected of producing water. A bridge plug was installed and the well was returned to production. 

Al Baraka #6 Well: Recompletion operations will commence soon to isolate water production from the lower Six Hills “F-2” sands and recomplete the well in the Six Hills “F-1” sands. 

The Al Baraka field is now producing some 600-700bopd gross. With the completion, work-overs and fracturing program now underway, production rates should soon begin to rise towards an expected year end exit target of some 2000bopd.

Sea Dragon has a 50% working interest in Jointly Operated Kom Ombo Block with Dana Gas Egypt owning the remaining 50%.

Commenting on these latest developments on our operations in Egypt, Company Chairman and CEO Mr. Said Arrata stated “ We are quite pleased with the preliminary results of the Al Baraka SE well. Once tested and the presence of oil in commercial quantities in the Kom Ombo sands is confirmed, additional development drilling will follow resulting in substantial increases in production. We are also encouraged by the continued success of the development drilling campaign in NW Gemsa and the anticipated rise in production and reserves as a result of the recently drilled Al Ola X-1 well and the planned water flood operations in the Al Amir SE and Geyad fields”.

(Sea Dragon Press Release)