Aurelian Finds Gas In Lilieci 1 Exploration Well In Bacau

Aurelian Gas & Oil Plc. (U.K.) late last week announced the discovery of significant natural gas resources following tests performed at the Lilieci 1 exploration well in Romania. The tests showed that the well had a substantial commercial potential of some 4.6 million cubic meters per day, a press release on the company"s website indicates.

"Lilieci-1 is our third successive successful well in Romania, following Fratauti-2 and Vicsani-1 in the Brodina EIII-1 concession. The flow rates and net pay on test indicate that we can expect to develop it as a commercial discovery. The well is our first well in the Bacau concession and highlights the general potential of the block. It particularly focuses attention on the potential of our two other strong leads, Schineni and Siretu," said Aurelian Managing Director Michael Seymour.

According to him, Aurelian is the project operator with 41% of the shares, while Europa Oil&Gas holds 19%. The remaining 40% is held by Romanian-based natural gas producer Romgaz. The well will be exploited in partnership with Romgaz, the operator of the 850 billion cubic feet Roman-Secueni gas field some 7 kilometres to the north. Europa Oil & Gas now has 60 days to elect whether to participate in the appraisal and development of the Lilieci discovery or to assign its interest in the discovery to Aurelian. If it elects to participate, Europa will pay Aurelian a sum currently estimated at 4.5 million EUR for the aggregate of its unpaid share of the well costs and an agreed premium.

In June 2008, Aurelian Gas & Oil announced they had reached an agreement with Romgaz regarding a number of projects to be developed in Romania, Slovakia and Poland. Under this agreement, Romgaz will have 40% of the Bacau concession, after paying for 66.67% of the Lilieci 1 well. According to this agreement, Romgaz has a 25% stake in the licenses held by the British company in Slovakia (Svidnik, Medzilaborce and Snina) and wil hold 30% in the Aurelian and GB Petroleum in Poland (Cybinka and Torzym), that is, 15% from Aurelian and 15% from GB Petroleum.

In Slovakia, Romgaz is to pay for the earthquake protection system worth 2.5 million USD, while in Poland the Romanian company will pay for 45% of the 3D imaging investigation planned for 2009 as part of the earthquake protection system. Investments in these perimeters which are part of the agreement with Aurelian will be scheduled in the investment plan for this year.