Vanco, Lukoil to drill offshore Ghana

HOUSTON, Aug 25, 2008 -- Vanco Ghana Ltd, together with partner Lukoil Overseas Ghana Ltd, has completed contractual arrangements for the Aban Abraham drillship to drill the Dzata-1 well, which will be the first exploration test on the Cape Three Points Deepwater block, offshore Ghana. The Aban Abraham deepwater drillship is currently in Sembawang Shipyard in Singapore being retrofitted to enable the unit to drill in water depths of up to 2,000 meters. Upon completion of shipyard activities, the Abraham will mobilize to West Africa. The Dzata-1 will commence upon arrival of the drilling unit in Ghanaian waters during the Fourth Quarter 2008.

Cape Three Points Deep Water Ghana block encompasses 1.25 million acres in water depths ranging from 200 to 3,000 meters in the Tano Basin. 2D and 3D seismic surveys acquired by Vanco reveal the presence of large compressional folds in a newly recognized sub-basin. The Dzata Prospect (meaning "Lion" in the Ga language) represents one of nine major structural and stratigraphic prospects defined on the block.

Approximately 70 miles northwest of Dzata, the discovery and successful appraisal of the Jubilee Field, with resources estimated at between 500 million and 1.8 billion barrels of recoverable oil, confirmed an active petroleum system in the Tano Basin and heightened the exploration activity in the region, where the industry will drill several wells in the next few months.

Situated in 1,869 meters water depth, the Dzata Prospect is a large anticlinal structure with numerous Lower and Upper Cretaceous potential reservoir horizons and distinct direct hydrocarbon indicators, including flat spots and a gas "chimney." The well will be drilled to a total depth of approximately 4,900 meters, or 3,031 meters below the mud line.

"Vanco and Lukoil have been working for more than a year to secure the Aban Abraham drilling slot to drill this exciting prospect," says Vanco President Gene Van Dyke. "We appreciate the patience and assistance of GNPC as we organize the drilling activity."

Vanco (Operator) holds a 28.34% interest in the Cape Three Points Deepwater block with Lukoil holding a 56.66% stake. GNPC, the state oil company, holds a 15% carried interest.

In an ever-tightening deepwater rig market Vanco and Lukoil are aggressively seeking to secure additional rig slots for planned wells in West Africa. Vanco is a leading deepwater independent with activity in CA'te d'Ivoire, Ghana, Equatorial Guinea, Gabon and the Ukrainian Black Sea.