Niko Makes Oil Find at Qara Dagh Block

- Niko Makes Oil Find at Qara Dagh Block

Monday, July 11, 2011
Vast Exploration Inc.

Vast Exploration provided the following update on the Niko-operated Qara Dagh Block in the Kurdistan Region of Iraq.

Drilling of the Qara Dagh well has reached a total depth of 3,908 meters, has been log evaluated and, as previously reported, the well has been cased to 3,558 meters with a 7 inch casing string. The following intervals have been evaluated where the results to date are summarized below.

Open Hole Interval - Shiranish Formation

This interval from 3,558 meters to 3,908 meters was acidized and flowed light oil confirming an active hydrocarbon column. The interval achieved maximum production rate of 550 barrels of oil per day and 800 mscf/d of gas, although these rates were not sustained for the entire duration of the test. The oil produced is 48 degrees API with no H2S.

From the data interpretation, and the significant spike in observed well bore pressures before the drilling was stopped, it is believed that the well has potentially entered into the first 10 meters of the next reservoir, the Cretacous aged Kometan formation, which is one of the primary target zones previously identified. It is important to note that the Kometan formation is regionally known to be a naturally fractured reservoir which has produced significant quantities of oil.

Mr. Ahmed Said, President & CEO, commented, "We are pleased with the recovery of light oil from this section. Although the reservoir quality appears to be naturally tight, the establishment of an oil column is significant. The possibility of drilling deeper to further evaluate production potential of the Kometan formation is currently under consideration."

Shiranish / Tanjero Interval

Certain sections in this cased interval was perforated and then acidized. The well had intermittent flow of light oil. The maximum rates achieved were 400 barrels per day of 42 to 47 API oil and 520 mscf/d of gas confirming a second active hydrocarbon system with no H2S.

Current Status and Forward Plan

The operator, Niko Resources, is currently in the process of testing the Aalijii Formation which consists of thick sequence of turbidities sand and argillaceous shales. While drilling this section in July 2010, it was reported that an increase in fluorescence, gas readings and free light oil in the mud system was detected.

Further, there are ongoing discussions between the consortium group to possibly deepen the well up to an additional 250 meters, subsequent to the completion of the current testing program. The primary purpose would be to drill deeper to further evaluate the production potential of the proliferous Kometan formation, the zone immediately below the Shiranish formation. Confirmation of the possibility and technical capability of re-entering the well and drilling deeper is expected over the next few weeks.

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Niko Updates Financial, Operational Results for Year-End

- Niko Updates Financial, Operational Results for Year-End

Wednesday, June 29, 2011
Niko Resources Ltd.

Niko reported its financial and operating results, including consolidated financial statements and notes thereto, as well as its managements' discussion and analysis, for the year ended March 31, 2011. The operating results are effective June 28, 2011. All amounts are in U.S. dollars unless otherwise indicated.

FINANCIAL HIGHLIGHTS

• There was a year-over-year increase of 32 percent in funds from operations.
• In October 2010, Niko repaid all of its outstanding long-term debt.
• At March 31, 2011, the Company's unrestricted cash totaled $108 million.
• In January 2009, the Company announced that the Canadian authorities were engaged in a formal investigation into allegations of improper payments in Bangladesh. The Company cooperated in the investigation, which was concluded on June 24, 2011. The Company pleaded guilty to one count of bribery under the Corruption of Foreign Public Officials Act, was fined Cdn$9.5 million and is subject to a 3-year Probation Order. In early 2009, the Company adopted a full anti-corruption compliance program.

EXPLORATION HIGHLIGHTS

• Indonesia: Four new offshore exploration blocks were added and the Company farmed out 45 percent of its working interest in the Seram and East Bula blocks and 40 percent of its working interest in the North Makassar Strait, West Papua IV and Halmahera-Kofiau blocks. Seismic acquisition activity continued during the year and the planning of drilling has commenced.
• Trinidad: The Company increased its exploration acreage in Trinidad with three new offshore blocks, all of which are in proximity to producing gas fields, and entered into an agreement, which closed subsequent to year-end, to acquire a 25 percent working interest in Block 5(c), located 94 kilometres off the east coast of Trinidad.
• Madagascar: Seismic acquisition has been completed and processing is underway.
• Kurdistan: Drilling was completed to a depth of 3,908 meters in May and testing is underway and expected to continue into July 2011.

PRESIDENT'S REPORT

The Company's strategy of accumulating a highly prospective exploration portfolio continued.

In Indonesia, four new blocks were added and farm-outs occurred in five blocks. Farm-outs are a part of the Company's exploration strategy. Partners in Indonesia now include Exxon/Mobil, Marathon, Repsol and Statoil.

In Trinidad & Tobago, four new blocks were added. Partners in this country include Centrica and RWE.

From a drilling perspective, in Trinidad and Tobago, the Company has contracted an offshore rig that is expected to spud the Company's first offshore well in the country in October. In Indonesia, Niko has established an extremely strong drilling organization staffed with seasoned professionals that bring extensive deep-water drilling experience.

During the past year, uncertainty regarding D6 production, reserves and gas price has been a concern. This uncertainty has been largely removed by an independent reserve report that shows that the revision to the Company's worldwide net proved plus probable reserves was approximately 6.8 percent. Operationally, the D6 field's gross gas production averaged approximately 2 billion cubic feet per day over the year with no downtime.

Due to a pre-emptive right, Niko expects to have the opportunity to increase its net interest by 30 percent in each or all of the D6, NEC-25 and D4 blocks in India. Niko expects this opportunity would be financed with debt.

Niko has a strong production base and an extensive portfolio of exploration prospects. Two thousand and twelve could prove to be Niko's most exciting year ever.

Production from the D6 Block has increased year-over-year and is the primary reason for total production increases of 25 percent compared to production in the prior year. The D6 Block is also the primary reason for improved operating netbacks as the D6 Block has higher realized prices and lower profit petroleum than the average of the Company's other properties.

Gas sales volumes from the D6 Block for the year averaged approximately 198 MMcf/d versus a budget of 210 MMcf/d due to well performance. Current gas sales volumes from the block are approximately 167 MMcf/d. Production from the D6 Block is expected to decline until additional wells are drilled and tied-in.

The Company is forecasting total production of 236 MMcfe/d for Fiscal 2012, which assumes that no additional wells will be tied in at D6 during the year and is consistent with the estimated production from total proved reserves in the Company's reserve report.

Operating cashflow increased in Fiscal 2011 primarily as a result of increased oil and gas sales from the D6 Block. Forecast operating cashflow for the coming year is expected to decrease with the decrease in production described above. In addition, maintenance of the onshore terminal and subsea systems for the D6 Block are expected to result in a decreased operating netback.

Exploration expenditures for Fiscal 2011 were for drilling activities on three exploration wells in the D6 Block, seismic acquisition in Indonesia and Madagascar, drilling of the first exploration well in Kurdistan and seismic on Block 2AB in Trinidad and carrying costs of the Trinidad blocks. Forecast expenditures for Fiscal 2012 include drilling on the D6 and D4 Blocks in India; seismic activity and preparation for drilling activities in Indonesia; completion of drilling the well in Kurdistan, and seismic activity in Trinidad on all blocks and commencement of drilling on Block 2AB.

Development expenditures forecast for Fiscal 2012 are primarily for workovers, drilling new wells and acquisition of compression equipment for the D6 block.

In addition to exploration and development expenditures, the Company's acquisition of Block 5(c), located 94 kilometres off the east coast of Trinidad closed in June 2011 for a purchase price of $78.1 million.

Funds from operations improvements resulted from improved volumes and operating netbacks partially offset by higher current income taxes, higher interest expense related to the Company's convertible debentures, a Cdn$9.5 million (US$9.7 million) fine described previously herein and lower other income as the prior year periods benefited from a favorable arbitration ruling related to a pipeline dispute.

Net income increased year-over-year as a result of the increase in funds from operations. The benefit from improved funds from operations was offset by higher non-cash charges related primarily to depletion and a loss on short-term investments.

Exploration Acreage

Niko has increased its exploration acreage with the addition of three blocks in Trinidad and four blocks in Indonesia. In addition, Niko farmed out 45 percent of its working interest in two blocks in Indonesia to Repsol and 40 percent of its working interest in three blocks in Indonesia to Statoil.

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Niko Drills Ahead at Qara Dagh Well

Niko Drills Ahead at Qara Dagh Well

Friday, April 08, 2011

Groundstar Resources Ltd.

Groundstar provided the following update on the drilling progress of the Qara Dagh - 1 exploration well in Kurdistan, Iraq.

Since the last update on January 14, 2011, the well has drilled to 3,558 meters measured depth ("MD"). Over the past several days, a 7 inch liner has been set and cemented at 3,558 meters in the upper Shiranish formation prior to drilling ahead.

Further drilling in the Shiranish and the Kometan formations is anticipated to a depth of 4,200 meters MD. Increased fluorescence and gas readings were observed.

The interval from 2,522 meters MD to 3,558 meters MD has been logged. Preliminary analysis by Niko Resources, the operator indicates possible prospective pay of up to 143 meters in the lower Tanjero and upper Shiranish formations. The top of the Shiranish formation has been interpreted to be at 3,420 meters.

The operator, Niko, has applied for a one year extension to the first phase of the first exploration period. The Qara Dagh Block is located in the prolific Zagros foldbelt that extends from southern Turkey across northern Iraq and into southwest Iran, which contain giant and supergiant accumulations of hydrocarbons. The large surface structure on the block known as Qara Dagh is a prominent anticline that rises as high as 600 meters above adjacent valley floors. This block, which is 65 kilometers by 5 kilometers, is located 60 kilometers southeast of the Taq Taq oilfield and 60 kilometers east of the giant Kirkuk oilfield, and is adjacent to a Heritage block with a recent oil discovery. Groundstar has a 6% beneficial interest in the Qara Dagh Block.