Canoro Resources Ltd.

Canoro Resources Ltd.

August 04, 2005 19:19 ET

Update on Canoro's South Jorhat Exploration Well and NE India Gas Pricing

CALGARY, ALBERTA--(CCNMatthews - Aug. 4, 2005) - Canoro Resources Ltd. (TSX VENTURE:CNS) is updating the progress of drilling for the South Jorhat exploration well on the AA-ON/7 exploration block in northeast India. The well has been drilled to a depth of 1,505 meters, which is near the top of the Tipam formation (the shallower of two primary target formations).

At a depth between 505 and 575 meters, natural gas and oil shows were reported from the wellsite. Prior to setting the intermediate casing, Canoro plans to log this section of the well bore to identify the specific location of the hydrocarbon bearing zones. Canoro then plans to perform tests to determine fluid content and pressure of the zones identified from the log data. The results to date are considered by management to be preliminary, and there is no assurance that the zones to be examined will contain commercial quantities of hydrocarbon or that the zones will have the productive capability to justify further development of this play.

After testing of these shallower zones is complete, Canoro expects to set the intermediate casing and resume drilling to total depth to penetrate the primary targets, the Tipam and Barail formations.

Gas Pricing Update

The Government of India has recently issued a directive regarding the pricing of natural gas in northeast India. The current floor price for gas is Rupees 1,700 per thousand cubic meters or approximately US$1.10/mcf. Effective April 1, 2006, the floor price for gas will increase to Rupees 3,200 per thousand cubic meters or approximately US$2.07/mcf. This 90% increase in the price of natural gas combined with excellent contractual terms substantially improves the economics of the Amguri and AA-ON/7 blocks.

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. Canoro started 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", "initiate" 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