Distribution of company announcements to the professional platforms, finance portals and syndication of important corporate news to a wide variety of news aggregators and financial news systems.
SAGA Oil has solved the previous long lasting difficulties with getting Russian well service companies to perform work according to SAGA's demand for high standard. When the new partnerships now have been established SAGA expects a sharp production increase as of July.
The Russian oil service industry is still in its early stage in its attempts to perform high quality well stimulation work, which unfortunately also includes planning and schedule keeping. This has resulted in more than 2 months of unnecessary delays in re-stimulation and restart of the wells being shut down earlier for workover.
The April production resulted in gross sales of 3915 bbls of oil.
SAGA has now reached an agreement with 4 companies (one owned by Schlumberger) for doing simultaneous stimulation work on the East Shaltinsky. In addition SAGA has taken over the technical/operational management of the stimulation work in order to safeguard that the optimum quality of work is done within the restriction of available equipment. This will hopefully remove the previous difficulties regarding availability of acceptable quality services. Generally availability of equipment is not a problem, but rather finding competence and equipment that will be able to perform the work according to normal standard requirements.
The ongoing large scale stimulation operation should bring the first positive results already in June, as the first work is starting next week. This should result in a constant increase of production as each well being treated and put back on stream.
Updates on significant production increases will be published as the results become available.
Malvin Hoeydal, President and CEO of SAGA Oil ASA comments: "The last delays have been a very frustrating experience but we are pleased to have solved all the issues on short and medium term and we are working on alternative plans for long-term resolution for the well service situation. In total this means that we will be back on track during the summer and head towards the production target by the end of 2008".
About SAGA Oil ASA SAGA Oil ASA was established in October 2005 to focus on exploration, development and production of oil and gas assets in Russia and the FSU. The company's founder has more than 20 years of business experience in the Soviet Union and Russia. SAGA Oil currently holds two production licenses in Orenburg region through its Russian subsidiary. The company started production from the first license in 2007, and it will gradually build up its production during 2008 and will start developing its new acreage. SAGA Oil has it's headquarter in Stavanger, Norway, and has around 80 employees in Norway and Russia. The company's shares are listed at the OTC market (Over the Counter-List) in Oslo, Norway.
For further information, please contact: SAGA Oil ASA - CEO Mr. Malvin Høydal, cell: +47 97422959, email: malvin.hoeydal@sagaoil.no SAGA Oil ASA - CFO Mr. Lasse Fjell, cell: +47 93249339, email: lf@sagaoil.no SAGA Oil ASA - Investor Relations Mr. Stein Are Valdal, cell: +47 97 50 99 82, email: sav@sagaoil.no
