McCallan

The "Project Poland" - Management of RWE-Dea, Hamburg / Germany, in a telephone call with the Managing Director of EuroGas Polska, Jochen Tietze, confirms a new oil discovery on the Medusa Concession Block in South-East Poland.

The Medusa Block is the directly Neighbor Block of Block No.436 and No. 456, two of the Concession Blocks which EuroGas Polska brought into the current Joint Operation Agreement between EuroGas Polska, Polish Oil and Gas Company (POGC) and Aurelian PLC. This area is one of the oldest production areas in the world. The Przemysl field, Poland’s largest gas field with reserves of 2.43 tcf (70 bcm), lies adjacent to the northeast.

A report conducted by independent Polish oil and gas experts, based on regional geological and geophysical evaluation of original and reprocessed data, indicated hydrocarbon prospects in 12 exploration leads within this area, with the largest one potentially containing 300 million barrels of oil equivalent.

Exploration in Poland
In Poland, in addition to a larger contiguous concession area in central Poland south of Lodz, we also hold concessions located southeast of Krakow.
The bulk of our exploration work in Poland in 2007 took place in the country's south. In March, our exploration well Ropa 2 in Block 435 along the rim of the Carpathian mountains (RWE Dea stake 100%) reached its final depth, unfortunately without encountering commercially recoverable volumes of gas. However, indications of oil were encountered by the exploration well Pola 1 which was subsequently sunk in the same block and completed by October. The results still need to be evaluated. Following the completion of the drilling operation on the Pola 1 well, we started work on the Raj 1 exploration well in our Block 313 (RWE Dea stake 100%) at the beginning of December. The target horizons are the sandstones of the Rotliegend formation.

To further expand our position in southern Poland, we are applying for additional blocks. Our participation in the 2007 licensing round was successful, and we were awarded the concession agreement for an area measuring about 560 km2. The region in question is directly adjacent to the northern boundary of our existing concessions. The government department responsible has indicated that we may be awarded an additional block.