Canoro Resources Ltd.

Canoro Resources Ltd.

July 04, 2005 20:12 ET

Canoro Updates its Exploration and Development Activity in India

CALGARY, ALBERTA--(CCNMatthews - July 4, 2005) - Drilling operations on Canoro Resources Ltd.'s (TSX VENTURE:CNS) South Jorhat exploration prospect, on the AA-ON/7 exploration block in northeast India, will commence following the arrival of replacement rig components for those that are presently missing and believed stolen. The well is expected to be spud by mid-July 2005.

In the second half of June, certain rig components were found missing following the rig move to the South Jorhat location. Canoro, in conjunction with the rig contractor and owner, has sourced all necessary replacement parts including the choke manifold, a key component.

The six-month primary term of this rig contract begins with the commencement of drilling operations at South Jorhat. After completing the South Jorhat exploration well, the rig will move to Amguri 5 and continue the workover program before moving to Amguri 6. The rig will be fully utilized under the contract and Canoro will have time to construct the next drilling location on the exploration block based on the South Jorhat results or proceed with additional work at Amguri.

Amguri Field Development Update

Canoro has completed the testing of three potential hydrocarbon zones in the Amguri 1 well and temporarily suspended the well as a potential gas producer. The well tested natural gas at rates exceeding 1 mmcf/d with water production of approximately 2,000 bbls/d from the bottom-most of the three zones. Remedial operations are required to shutoff water production from this zone and the well is considered non-commercial until gas market development justifies further operations to produce the gas. The service rig is being released and further workover operations on Amguri 5 and Amguri 6 are deferred until the South Jorhat exploration well is complete.

According to recently completed reprocessing and interpretation of the existing 2-D seismic, the Amguri 1 well was drilled on the structurally lowest part of the Amguri field and is therefore most susceptible to water production. Amguri 5 is believed to be the next structurally highest well and Amguri 6, the last well in the workover program, is the structurally highest well. It is also believed that highest part of the Amguri structure has not been drilled.

Canoro has started designing a 3-D seismic program on the Amguri block to be undertaken in the upcoming dry season, which extends from late-2005 into early-2006. Information gained from the interpretation of the existing seismic database, the planned 3-D seismic, and the well workover program will provide the necessary information to design the most effective full field development plan for the Amguri field.

Canoro is a Canadian-based international oil and gas company operating a development and an exploration block in the prolific Assam/Arakan basin of northeast India. The Company is testing and rehabilitating production from the suspended Amguri oil and gas field where it is the operator and has a 60% working interest. It will soon start drilling its first exploration well on the AA-ON/7 exploration block where it is the operator and has a 65% working interest. Common shares of Canoro trade on the TSX Venture Exchange under the symbol 'CNS'.

Certain statements contained in this news release may be considered as "forward looking". Such statements are generally identifiable by the terminology used, such as "intend", "plan", "expect", "estimate", "budget", "outlook" or other similar words. Such "forward looking" statements are subject to risks and uncertainties that could cause actual results to differ materially from estimated or implied results.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this News Release.

Contact Information

  • Canoro Resources Ltd.
    Rob McInnis
    Manager, Investor Relations
    (403) 543 - 5748
    (403) 543 - 5740 (FAX)
    Canoro Resources Ltd.
    2810, 715 - 5th Ave SW
    Calgary, Alberta T2P 2X6
    (403) 543 - 5748
    (403) 543 - 5740 (FAX)