Tanganyika Oil Company Ltd.
TSX VENTURE : TYK

Tanganyika Oil Company Ltd.

July 15, 2005 10:30 ET

Tanganyika Operations Update Private Placement Closed

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - July 15, 2005) - Tanganyika Oil Company Ltd. (the "Company" or "Tanganyika") (TSX Venture:TYK)(NYA MARKNADEN:TYKS) is pleased to provide an operations update for activities in both Egypt and Syria.

EGYPT

An appraisal program on the Company's newly discovered Hoshia field in Egypt is in progress. The first appraisal well, Hoshia 2, was drilled to a total depth of 7,100 feet. This well was drilled updip of the Hoshia 1 discovery well and is currently being completed for testing. Preparations are now underway to drill the first development well, Hoshia 3. A rig (ZJ45L) has been mobilized to the new site and is 80% rigged up. The discovery well, Hoshia 1, is on production and currently averaging 700 barrels of oil per day with 0.3% water-cut.

The Ministry of Petroleum has approved the company's development-lease application for the new Fadl discovery. Development-lease approval for West Hoshia and South Rahmi is expected over the next few months.

Gross production is currently averaging approximately 2,656 barrels of oil per day for Egypt, which includes contributions from the Hana and Hoshia fields.

The Company has a 70% working interest in the Hana field and a 45% working interest in the Hoshia field.

SYRIA

The Company's fourth horizontal development well at Oudeh spudded on July 7, 2005 and is drilling ahead at 405 metres. The well is planned to have a 600-800 metre horizontal section in the Shiranish carbonate oil reservoir. The Syrian Petroleum Company has approved the company's budget and long-range plan for Oudeh announced on June 27, 2005. Gross production at Oudeh is currently averaging approximately 1,950 to 2,150 barrels of oil per day.

The 90 day field rate test period for Tishrin will conclude in July. Once the company agrees with the initial contract oil rate for the base production, earning activities will be initiated. Production sharing for Tishrin starts after 3 well workovers.

The Company has a 100% working interest in the Oudeh, Tishrin and Sheikh Mansour fields.

Gary Guidry, President of Tanganyika Oil, commented, "Our mandate is execution excellence. We've got continuous drill programs in Syria and Egypt budgeted for and in progress. The focus is growth of cash flow per share and net asset value. We're pleased with the encouraging results from our appraisal program on our new Hoshia field in Egypt and the first development well of our new capital program for Syria is underway."

The Company also reports that the private placement announced on June 27, 2005 has closed. The Company sold on a non-brokered, private placement basis, 5 million shares of the Company at a price of $7.60 per share for gross proceeds of $38 million. A 5% finder's fee was paid with respect to a portion of the private placement. Net proceeds of the private placement will be used for development of the Company's projects in Syria and Egypt and for general corporate purposes. The private placement has received regulatory approval and the securities have been issued to the investors.

Certain statements in this press release are forward-looking statements. Specifically, this press release contains forward-looking statements relating to management's approach to operations, estimates of future sales, production and deliveries, business plans for drilling and development, estimated amounts and timing of capital expenditures, anticipated operating costs, royalty rates, cash flows, transportation plans and capacity, anticipated access to infrastructure or other expectations, beliefs, plans, goals, objectives, assumptions and statements about future events or performance. The reader is cautioned that the assumptions used in the preparation of such information, although considered reasonable by the Company at the time of preparation, may prove to be incorrect. Actual results achieved during the forecast period will vary from the information provided herein as a result of numerous known and unknown risks and uncertainties and other factors. Such factors include, but are not limited to: general economic, market and business conditions; industry capacity, competitive action by other companies, fluctuations in oil and gas prices; the results of exploration and development drilling and related activities; the uncertainty of estimates and projections relating to production, costs and expenses; uncertainties as to the availability and cost of financing; fluctuations in currency exchange rates; the imprecision in reserve estimates; risks associated with oil and gas operations, such as operational risks in exploring for, developing and producing crude oil and natural gas; risks and uncertainties involving geology of oil and gas deposits; the weather in the Company's area of operations; the ability of suppliers to meet commitments; changes in environmental and other regulations; actions by governmental authorities including changes in laws and increases in taxes; decisions or approvals of administrative tribunals; risks in conducting foreign operations (for example, political and fiscal instability or possibility of civil unrest or military action); the effects of acts of, or actions against international terrorism; and other factors, many of which are beyond the control of the Company. There is no representation by the Company that the actual results achieved during the forecast period will be the same in whole or in part as those forecast.

Tanganyika Oil is a Canadian oil and gas company with production and exploration assets in Egypt and Syria. Its shares are traded on the TSX Venture Exchange and Swedish Depository Receipts trade on the Nya Marknaden of the Stockholm Stock Exchange.

ON BEHALF OF THE BOARD

Gary S. Guidry, President and C.E.O.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Tanganyika Oil Company Ltd.
    Sophia Shane
    Corporate Development
    (604) 689-7842
    (604) 689-4250 (FAX)
    www.tanganyikaoil.com