The Board of Indago Petroleum Limited notes the recent movements of the Company's share price. The Board believes that the share price movement may result from rumours surrounding the drilling of the company's Al Jariya well on the Jebel Hafit prospect in the Sultanate of Oman. The Company owns an approximate 50% interest in Block 31 which contains the Jebel Hafit prospect and the same interest in two other exploration blocks in Oman.

In response to these share price movements, the Company provides the following drilling update.

The Al Jariya-1 well, which is expected to drill to a total depth (TD) of +/- 5,900 metres, has reached a depth of 4,650 metres and 9 5/8' casing has been run and cemented to approximately 4,600 metres.

Although the well has encountered few mechanical or technical problems since the running of an 113/4' liner at approximately 2,600 metres, drilling progress has been slowed by the presence of extensive chert bearing intervals within the Upper Cretaceous shales of the Upper Fiqa Formation. In addition, the running of the 113/4' liner has required that the hole be opened progressively to 10 5/8' or 121/4' to allow the running of the 9 5/8' casing string to the present depth.

In all regards, the geological aspects of the well remain consistent with the pre-drill prognosis. However, the estimated total cost of the well has increased in proportion to the number of days taken to drill it and the current estimate is that the cost through total depth logging will be $50.5 million ($25.25 million Indago's share). Testing, if required, will be additional to this amount. Current estimates suggest the well should be at total depth before mid-February 2008 and, if testing is required, this should be complete by mid-April.

Although the delays as outlined above have substantially increased Indago's investment in the well, the additional funding requirement has not compromised the Company's ability to complete its current committed exploration programme.

Once operations at the Al Jariya-1 well have been concluded, drilling will commence on the next well in the programme: the Zad well on the Adam prospect in Block 47, provisionally scheduled to start in the second quarter of 2008.

David Bremner, CEO, commenting on today's announcement said, 'Although progress on this difficult well has been much slower than we had hoped, the setting of the 9 5/8' casing is an important milestone which greatly increases the chance that we will successfully reach the objective Cretaceous carbonates.'

Indago holds an approximate 50% interest in Block 31. The Operator, RAK Petroleum PCL, holds the balance of the interest.

Tags: Indago Petroleum Limited