1 Venezuela Chevron Corp. tested gas flowing at a rate of 51 million cu. ft. per day, restricted by equipment, in two of six gas intervals within a gross thickness of 140 meters of pay at its Macuira 1X wildcat, the first well in its Block 3 concession on the Deltana Platform east of Venezuela and south of the island of Trinidad. The well is on trend with discoveries Chevron made last year in the Loran Field area in Block 2. The new discovery may push Chevron's plans forward for a liquefied natural gas plant in the area to process Deltana Platform gas. The new discovery is in 115 meters of water approximately 24 kilometers southeast of the Loran wells and 121 kilometers offshore Venezuela. If Chevron declares the discovery commercial, Petroleos de Venezuela SA has the option of backing in for 35% of this field. 2 Brazil Oklahoma City-based Devon Energy will spend up to $300 million to develop its offshore Polvo Field in the BM-C-8 Block in the offshore Campos Basin. The field, discovered in 2001, is in 94 meters of water. Devon has another discovery in deeper water in the same block; to date it has drilled three exploratory wells and two appraisal wells on the block. It plans to bid out a fixed production and drilling platform and floating production, storage and offloading vessel to handle 50,000 bbl. of oil per day. It anticipates first production in the second half of 2007. Devon has found an estimated 50 million bbl. of oil on two structures in the block to date, and the field has potential for more production. 3 Falkland Islands U.K. firm Rockhopper Exploration Ltd. has received two exploration and production licenses in the North Falkland Basin offshore the Falkland Islands. The new tracts, PLO32 and PLO33, formerly were licensed to Shell. That company conducted 3-D seismic over the territory and drilled two wells in the 1990s with oil and gas shows in one well and live oil shows at the surface in the other. Rockhopper plans to conduct additional 3-D seismic in the next two years. Meanwhile, it plans a drilling program with Desire Petroleum Plc. In the Southern Falkland Basin, a joint venture of Falkland Oil & Gas and Hardman Resources has been granted a two-year extension on its 33,000-sq.-kilometer license, according to Dow Jones. The extension until July 2007 allows the companies to conduct 4,000 kilometers of 2-D seismic and 2,000 sq. kilometers of 3-D seismic. Phase II, from July 2007 to July 2010, requires the companies to drill two wells. 4 United Kingdom Maersk Oil will acquire a 25% equity interest in Chevron's P1025 license on the Atlantic Margin. Chevron will keep a 65% equity interest, and Talisman Energy, Calgary, will keep its 10%. Blocks 213/5 and 214/1 in the Faroe/Shetland Basin are in the license area. The companies plan to conduct a 2-D seismic survey in the area this year over their Capercaillie prospect and may drill an exploratory well in 2006 or 2007. The prospect is in some 1,500 meters of water approximately 200 kilometers northwest of the Shetland Islands. 5 Egypt Houston independent Apache Corp. has discovered a new field in Egypt and successfully appraised another. The discovery was made with the El Diyur-2X on the El Diyur concession in the Western Desert. A test flowed at a rate of 1,177 bbl. of oil per day from three meters of perforations. This is the first productive well on the concession, and in total it encountered 80 meters of logged oil pay. Production will start after approval of a development lease by Egypt's petroleum ministry. Apache is operator of the El Diyur concession and has 46.5% interest; Chilean firm Sipetrol holds 41%; and IPR Transoil, Dallas, holds the remaining 12.5%. Meanwhile, Apache's Tanzanite-2 well on the West Mediterranean onshore concession flowed 2,846 bbl. of oil and 640,000 cu. ft. of gas per day in the first test of the Cretaceous-age Alamein Dolomite formation in the field. The well, approximately 610 meters northeast of the Tanzanite 1X discovery, was drilled to a total depth of 2,766 meters. The test was conducted on the top four meters of the targeted Alamein Dolomite formation while an additional seven meters of net pay were logged in the overlying Dahab formation. Apache has a 65% contractor interest in the concession with German firm RWE Dea holding the remainder. 6 Mauritania Australian firm Woodside Petroleum has decided on the first three exploration wells for its 2005 Mauritanian drilling campaign, with another three likely before year-end. Two of the wells, Sotto and Colin, will target relatively high-risk but potentially high-reward prospects in PSC Area A. The third well, Espadon, is targeting a medium-risk, moderate-reward prospect close to the Tiof discovery in PSC Area B. A further three wells are likely before year-end, including one in PSC Area C6 where the Thon-1 dry hole was previously drilled. 7 Kuwait Kuwait Oil Co. made a light-oil discovery while targeting a new zone of its northern Sabriya Field near Iraq, with the find flowing 3,052 bbl. per day during initial tests. Well SA-215 was drilled to 5,094 meters to the base of the Marat formation. KOC is pressing ahead with an exploration program targeting deeper layers of its oil fields, specifically in the northern and western parts of the Persian Gulf emirate, in a bid to increase its reserve base. Kuwait is planning to increase its crude output capacity to 3 million bbl. per day by 2010 from 2.4 million barrels per day at present. The company is planning to drill more than 280 development wells during the coming three years. 8 Yemen Australian operator Oil Search Ltd. has won two Yemen blocks and is awaiting final ratification on a third, with exploration work to kick off later this year. The company, on behalf of partners Kufpec (Aden), Voyager Energy and Adelphi Energy, revealed it was awarded blocks 7 and 74 from the republic's recent 2005 international bid round. It is also awaiting final ratification of a production-sharing agreement for Block 3, awarded to it and partner Petoil through direct negotiations with the Yemeni government. Blocks 7 and 3 are in the eastern sector of the onshore Shabwah Basin, and Block 74 is within the Masila Basin. Exploration work will start in blocks 7 and 74. 9 China Houston-based Far East Energy Corp. spudded the first two horizontal wells it plans to drill in its coalbed-methane project in the Shouyang Block in Shanxi province. The company farmed out more than 1 million acres from ConocoPhillips. Far East plans to drill the FCC-HZ01 well underbalanced. This, and its sister well, will reach a vertical depth of approximately 550 meters, the first to the No. 15 coal seam and the second to the No. 3. After that, the company will run more than 4,000 meters of laterals. The wells will take 35 to 60 days to drill. The newly built West-East Pipeline to Shanghai passes 10 kilometers south of the Shanxi project and the Shanjin II Pipeline to Beijing, scheduled for completion in September, is 40 kilometers north of Shouyang Block. 10 Australia Chevron has successfully bid with partner Shell for the exploration rights to four deepwater blocks in the Carnarvon Basin offshore Western Australia, with at least two wildcats to be spud in an initial program. Chevron will be the operator and hold a 50% interest, and Shell will hold the remaining 50%. The permit areas, WA-364-P, WA-365-P, WA-366-P and WA-367-P, are on the deepwater Exmouth Plateau, 100 to 300 kilometers northwest of the Western Australian coastline. The proposed three-year work program includes the acquisition of 5,032 kilometers of 2-D seismic, 3,521 sq. kilometers of 3-D seismic and the drilling of two exploration wells. Seismic work will begin later this year. There is potential for a further three-year work program. 11 Australia Santos Ltd. has further expanded its oil and gas exploration acreage in the Sorrell Basin offshore Tasmania. The Australian company has been awarded a permit by the Commonwealth and Tasmanian governments to explore for oil and gas in Block T/40P, 100 kilometers off Tasmania's northwest coast. The new permit area, covering approximately 315 sq. kilometers in water generally less than 200 meters, is the fifth offshore exploration permit held by Santos in the Sorell Basin. The company has been awarded the block for six years with a work program, which may result in the expenditure of up to $17.4 million for 2-D and 3-D seismic and the drilling of one exploration well. Santos holds a 100% interest in T/40P and is the operator.

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