SOURCE: Sky Petroleum, Inc.

May 18, 2005 09:37 ET

Sky Petroleum Announces Participation in Offshore Oil and Gas Property

Strategic Alliance -- UAE-Based Buttes Gas and Oil Co International Inc., a Wholly Owned Subsidiary of Crescent Petroleum Company International Limited

AUSTIN, TX -- (MARKET WIRE) -- May 18, 2005 -- Sky Petroleum, Inc. (OTC BB: SKPI), an oil and gas exploration and development company, today announced the company has reached a definitive agreement with United Arab Emirates-based Buttes Gas and Oil Co. International Inc. ("BGOI"), a wholly owned subsidiary of Crescent Petroleum Company International Limited ("Crescent"), to participate in an off-shore oil and gas project in the Mid East Gulf. The project is a proposed infill drilling program in the Mubarek oil and gas field.

The alliance with BGOI and Crescent unites Sky Petroleum with one of the United Arab Emirates' most established and successful, integrated low-cost operators with over 30 years of extensive experience in the region. As established operators in the Mubarek oil and gas field for over three decades, BGOI and Crescent bring extensive knowledge of the geological formations and reservoir potential of the Mubarek Field.

Mubarek Development Project

The first commercial oil was produced in the mid 1970s in the Mubarek Field, marking the beginning of over three decades of continuous production. The total estimated cumulative recovery to date exceeds 100 million barrels of oil. Sky Petroleum believes that this represents approximately 30% of the estimated original oil in place (STOIIP) of 275 million barrels and that there are significant additional reserves that may be produced by the new infill well program. The Mubarek Field production facilities have the capacity to process 60,000 barrels of oil per day.

The company expects the first phase of a proposed two phase infill drilling program into the Ilam/Mishrif reservoir situated within the Mubarek Field to commence in early 2006.

Financial Structure

Sky Petroleum is budgeting approximately US$25-28 million on infill drilling to maximize its interest in the Mubarek Field project. The company is currently finalizing a financial strategy to fund the required development expenditures along with additional funds for its own operating and working capital needs.

About Sky Petroleum

Sky Petroleum (OTC BB: SKPI) is an oil and gas exploration and development company. Sky Petroleum's primary focus is to seek opportunities where discoveries can be appraised rapidly, and developments can be advanced either by accessing existing infrastructure, or by applying the extensive experience of established joint-venture partners. In addition, the company also plans some higher risk, higher reward exploration prospects.

Safe Harbor

Except for historical information, the matters set forth herein, which are forward-looking statements, involve certain risks and uncertainties that could cause actual results to differ. Potential risks and uncertainties include, but are not limited to, Sky Petroleum's ability to enter the oil and gas industry, perceived or actual benefits of the name change or forward stock split, Sky Petroleum's current capital structure and its ability to raise additional capital, the competitive environment within the oil and gas industry, the extent and cost effectiveness with which Sky Petroleum is able to enter the oil and gas industry, obtaining drilling equipment on a timely fashion, commodity price risk, and the market acceptance and successful technical and economic implementation of Sky Petroleum's intended plan.

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