Timan Oil & Gas says that following the submission of technical data, the Russian State Reserves Committee (GKZ) met on 18 July 2008 and approved new reserves for the Nizhnechutinskoye Field (NGPT Field). Subsequently on 30 September 2008 the Russian Federal Subsoil Agency (Rosnedra) registered these reserves into the State Register of Natural Reserves as follows:

• 235.8 million tonnes of Category C1+C2 unrisked original oil in place (OOIP) (approximately 1,722 million barrels), which includes 109.6 million tonnes of Category C1 reserves (approximately 800 million barrels); • 86.4 million tonnes of Category C1+C2 recoverable reserves (approximately 631 million barrels) which includes 40.9 million tones of Category C1 reserves (approximately 299 million barrels).

The previous estimated Category C1 + C2 recoverable reserves for the NGPT Field, stated in accordance with the Russian classification, were 4.9 million tonnes (around 35.2 million barrels) including 0.3 million tonnes of Category C1 reserves (approximately 2.3 million barrels) as of November 1999. The increase is as a result of the substantial amount of new technical data gathered since then and recently submitted to GKZ.

Miller and Lents Ltd, the Company’s independent reserves auditor, assessed the NGPT Field as containing 191.3 million barrels of 2P (Proved plus Probable) Reserves under the SPE Standard in June 2006. It should be noted that there are fundamental differences between the Russian Classification System and SPE Standard, which make direct comparison of resource/reserve numbers problematic. In addition the Russian State Classification system is not a recogonised standard under the AIM Rules, and as such the Company is required to obtain an updated assessment under the SPE Standard as soon as practicable. Therefore Timan will shortly submit a documentation package to Miller and Lents for the purpose of obtaining a revised assessment. Any reassessed SPE numbers are likely to differ from the Russian Classification numbers disclosed above.

As the Company announced on 9 October 2008, given the financing which the Company has recently obtained, management is now focused on recommencing drilling operations at NGPT in the middle of November 2008. The Company intends to drill a further 25 wells to expand the existing NGPT 25 well Pilot Program in cooperation with its German drilling contractors BLZ (BLZ-Geotechnik GmbH).

Alexander Kapalin, CEO of Timan commented: “The new sizable increase in the NGPT Russian State registered reserves is a significant step forward for the Company’s profile in Russia. However we keep focused on realizing production from these reserves and extracting oil in commercial quantities. We continue to pursue the immediate objective of drilling further wells using the improved well design and completion techniques, scaling up to the full field development, and we look forward to achieving a significant increase in oil production.”

The NGPT Field with its net land position of 1,260 km2, is held through a combined licence that runs until April, 2024. The Field is located in the Timan-Pechora region, 17 kilometres from Ukhta, a major town in the Republic of Komi. The field is situated approximately 1,200 km from Moscow. Its surrounding areas have well established infrastructure, allowing all year access for field operations.

The NGPT shallower reservoir, known as Reservoir I, contains a light, low viscosity, sweet crude oil (34 degrees API), in contrast to the heavier oils found in the underlying Reservoirs A and II.

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