Petroceltic International provides an update on operations at the Ain Tsila field on its Isarene permit (Blocks 228 & 229a) in south eastern Algeria. Petroceltic operates the permit with a 56.625% interest, Sonatrach holds a 25% interest, and Enel holds an 18.375% interest, pending final Government of Algeria ratification.

AT-8 well testing results update

The AT-8 well, a vertical well located in the north of the Ain Tsila field reached a total depth of 1,662m TVDSS on 22 August 2011. A gross Ordovician reservoir interval of 121m was penetrated with 33m of net sand and 24m of interpreted net pay.

Following the logging three separate open-hole zones were isolated for individual testing. All three zones have now been tested without fracture stimulation ("fraccing"), and the test results are set out below.

The cumulative maximum rate for the three zonal tests is 15.4 mmscf/d.

The AT-8 well is now being prepared for fracture stimulation in the Upper zone and a further announcement will be made in due course.

The AT-8 well was designed to appraise a pop-up feature with a mapped fault system and to test the extent of the hydrocarbon column in the north of the field. The well, which is the first well to be drilled with the KCA Deutag Rig T-211, is located 5km north east of AT-1 and 4.5km north west of the AT-5 well in an undrilled section of the field.

AT-9 operational update

The AT-9 well was spudded on 12 September and is now drilling ahead, towards a planned total along hole depth of 2,494m. The well, which is the 6th in the current appraisal programme, is currently ahead of schedule.

AT-9 is a horizontal appraisal well and is located towards the centre of the Ain Tsila field 4.3km north east of the AT-2 appraisal well and 7.8km south east of the AT-1 discovery well. The planned horizontal section within the Ordovician reservoir is up to 390m long.

It is anticipated that AT-9 will take about 60 days to drill. The well will then be completed prior to being suspended for testing. Testing will be carried out with the rigless testing unit once it has completed operations on AT-7, which is currently anticipated to be around the middle of November 2011.

Brian O'Cathain, chief executive of Petroceltic commented: "We are delighted to have achieved such excellent flow results from the Ordovician reservoir at AT-8 without fracture stimulation. These results confirm the potential for good productivity towards the north of the field, are likely to have a positive impact on our estimate of recoverable gas reserves and are very encouraging for the ultimate commercial development of Ain Tsila. They will be incorporated into the Final Discovery Report, (Field Development Plan), which we plan to submit to the Algerian competent authorities by the end of January 2012.

"Our appraisal programme is continuing at a rapid pace with further results from AT-8, the AT-7 well test results, and the AT-9 well logging and testing scheduled before year end."

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