WSG Group Systems Inc.

November 01, 2005 11:40 ET

WSG Announces Second Gas Discovery in Indonesia

CALGARY, ALBERTA--(CCNMatthews - Nov. 1, 2005) -


WSG GROUP SYSTEMS INC. ("WSG") (TSX VENTURE:WSG) today announced Duinord Petroleum Inc.'s ("Duinord") second natural gas discovery offshore North Sumatra, Indonesia. The Togar-1A well showed 22 feet of gas pay in the Middle Keuptapang sandstones. As previously announced, WSG has changed its business purpose to explore and develop oil and gas greenfields internationally and in North America and has agreed to complete a business combination (reverse takeover) with Duinord. After the combination, WSG intends that the new company will trade on the TSX Venture Exchange as GFI Oil & Gas Corporation.

Duinord, through its wholly owned subsidiary, holds a 25% interest in the offshore block covered by the Asahan Production Sharing Contract which is operated by Asia Petroleum Development (Asahan) Limited, a subsidiary of Serica Energy PLC. The size of the accumulation is not believed to be commercial but the confirmation of the presence of hydrocarbons in the Keutapang sandstones is a significant development for understanding the potential value of other prospects being studied within the block.

This important new information will now be incorporated into further evaluation of the block to identify future drilling locations. The extensive Asahan Offshore PSC, which covers an area of 2,185 square kilometers, is located about 45 kilometers north of Medan, one of Indonesia's largest cities.

The Togar-1A well was drilled to a total depth of 6,451 ft below mean sea level ( and entered gas-bearing Middle Keutapang sandstone at a depth of 3,385 The well encountered 22 ft of net gas pay sand with a gas-water contact at 3,410 Duinord believes the sands are of excellent reservoir quality, with porosities reaching 35%. The well also encountered several additional reservoir sands in the Middle Keutapang but only one was found to be gas bearing at the Togar-1A location. The Asahan Offshore PSC contains net undeveloped acreage of 1,050 square kilometers.

A bottom-hole sample of the gas in the Middle Keutapang reservoir tested for high calorific value, having a methane content of approximately 96% and very low concentrations of inert or acid gases.

The Togar 1A well is the second of a two-well drilling program. It followed the successful Kambuna #2 well drilled in the Glagah Kambuna TAC Block that tested 17.5 million cubic feet of gas and 1500 barrels of condensate per day.

Duniord President Raymond LaGarde said: "The confirmation of gas and the number of excellent reservoirs found in the Togar-1A well provides great encouragement for future exploration in the Asahan Block. This data, in combination with a new seismic program currently being shot will greatly enhance our ability to manage risk as we continue to evaluate this largely under explored block."

As previously announced, 1,500 kilometers of new seismic data is currently being acquired to support the delineation of several key prospects. This new seismic data is being analyzed and integrated with the new information from the Togar-1A well in order to select further exploration well locations. Drilling rig tenders for the 2006 drilling program have already been invited.

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

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