AWE reported that as at 0600 hours Yemen time on January 11, 2011 (-8 hours EDST) the Al Meashar-2 appraisal well in Block 7, Yemen, was being drill stem tested using a jet pump over the basement target interval. Oil was produced at an estimated average of 145 barrels/day. The well is currently shut in for further build-up tests and will then be suspended.

Al Meashar-2 is the first appraisal well of the Al Meashar-1 oil discovery, which was drilled in early 2010. The discovery encountered oil in the fracture basement; however oil flow rates were limited due to potential reservoir damage which was incurred while drilling.

The appraisal well was drilled from the existing Al Meashar-1 well pad and deviated parallel to the discovery well. The well was drilled using Managed Pressure Drilling equipment, which is designed to minimize damage from drilling fluids in the reservoir.

The participants in Block 7 are:

•ARC Energy Holdings Ltd 21.25% •Oil Search (ROY) Ltd (Operator) 34.00% •Kuwait Foreign Petroleum Exploration Co. (Aden) Ltd 21.25% •Yemen General Corporation for Oil and Gas 15.00% •Mitsui E & P Middle East B.V 8.50%

Tags: AWE Limited