CAMAC has commenced drilling on the first of two wells planned for the 2010 work program on its Zijinshan Gas Asset located in the Ordos Basin in Shanxi Province, China. Drilling has begun on well ZJS-02, which is planned to be followed consecutively by well ZJS-03.

Wells ZJS-02 and ZJS-03 are part of a planned multi-well appraisal program that commenced in 2009 after the company acquired 160km of 2D seismic data over the Zijinshan Gas Asset.

The head of the Company's China operations, Mr. Richard Grigg, Managing Director and Senior VP of CAMAC Energy, commented, "Our Zijinshan Gas Asset is an exciting project for us at CAMAC Energy as well as for our Chinese partners. With China's increasing drive for cleaner burning fuel, we are pleased to have the support from the national, provincial, and local levels of government in China for our efforts to bring early production from the Zijinshan Gas Asset."

The Company's Zijinshan Gas Asset covers an area of 175,000 acres in the Ordos Basin in Shanxi Province, the second largest petroleum-bearing basin in China. China United Coal Bed Methane Company (CUCBM) estimated that the Zijinshan Gas Asset has potential gross gas resources in excess of 3.8 tcf.

CAMAC Energy owns 100% of the foreign contract interest in the Zijinshan production sharing contract (PSC) in partnership with PetroChina CBM Co.

Mr. Bill Dozier, the Company's Interim CEO, stated, "We are pleased at the progress of our work program on the Zijinshan Gas Asset to fully appraise its commercial potential. The drilling of the two additional wells represents an important step as we move forward with this exciting asset that we anticipate will provide significant growth and gas reserve potential for CAMAC Energy in the Asia region."

The Zijinshan Gas Asset is in close proximity to major infrastructure, including the West-East Gas Pipeline and the Ordos-Beijing Pipeline. Under the current Chinese economic stimulus initiative, another new gas pipeline is near completion in the Ordos Basin, also in close proximity to the Zijinshan Gas Asset.

Tags: CAMAC Energy Inc.