Kennedy-1HWell logging operations were undertaken across the...

Kennedy-1H

Well logging operations were undertaken across the open horizontal portion of the well indicating several extended zones of potential pay in the upper part of the Austin Chalk which are encouraging in their own right. As this well represents the early stage in the appraisal of a new reservoir and stratigraphic play it requires the careful selection of a fracture stimulation program to optimise the flow and recoverability of any hydrocarbons. Preparations for the planned extensive fracture stimulation testing program are continuing. The timing of these operations remains subject to the finalisation of completion design and sourcing of services and are intended to be undertaken as soon as practical.


The Koyunlu-2 exploration well commenced drilling on 19 January 2008. The proposed total depth of the Koyunlu-2 well is 1,260 metres and the target reservoirs are the Cretaceous age carbonates of the Garzan Formation and the Mardin Group. These are the same reservoirs that host oil in the Raman fields and numerous other oil fields in the region. The Operator, ARAR Petrol Gaz AUPAS, expects to reach target depth within approximately 3 weeks on a trouble free basis.



Your board is also aware of the impending expiry date of 31 March 2008 of the Company’s listed options. Whilst the Company is making every endeavour to expedite activities at each of our projects in an efficient manner, Eureka is not the operator or majority interest owner of either of these projects and accordingly has limited control over the timing of operations. Additionally, your Board is reluctant to take short term decisions that are not in shareholders longer term commercial interests. This particularly applies to the Sugarloaf project where we expect to be able to benefit from results of the nearby drilling and appraisal activities in terms of optimising our future efforts from an operational, financial and strategic perspective. We believe that the value of the Company’s assets are not adequately reflected in Eureka’s current share price in what is now a difficult period for equity markets worldwide.