Energulf to start Namibia drilling

EnerGulf Resources Inc. announces that the co-venturers in Block 1711, offshore Namibia, at the previously announced Operating and Technical Committee meetings held this week in Moscow, have selected the drilling location for the Kunene #1 well and contracted a drillship for drilling of this, the first well on the Block.

Sintezneftegaz Namibia Ltd., the operator, has entered into an Assignment Agreement (“Agreement”) on behalf of the co-venturers (EnerGulf, PetroSA, NAMCOR, and itself) with Esso Exploration Inc. (“Esso”), a division of ExxonMobil, and Larsen Oil and Gas Ltd. (“Larsen”), the contractor of the vessel, for use of the drillship Deep Venture to drill the Kunene #1.

The Deep Venture is currently under contract to Esso drilling along the coast of West Africa. The co-venturers will accept the rig, pursuant to the terms of the Agreement, when Esso releases the rig from its well location offshore Angola, no earlier than December 23, 2007 and no later than February 15, 2008, or as otherwise agreed by the parties. A deposit to secure the rig has been paid by the operator to Larsen.

The costs to drill this well to the targeted total depth of 4,400 meters below sea level, are estimated to be approximately US$50 million and an additional approximate US $9 million, if it is decided by the co-venturers to penetrate deeper objectives, of up to 5,500 meters below sea level. The drilling time is estimated to be approximately 50-60 days. EnerGulf has a 10% interest and is responsible for 10% of the costs. EnerGulf will be reviewing financing alternatives to provide for sufficient capital required for the drilling of the Kunene #1 and to fund other corporate activities.

Block 1711 is situated in the Namibe basin off the northern coast of Namibia along the international boundary with Angola. The two separate exploration prospects, the Kunene and Hartmann, have been identified by extensive modern seismic data on the 893,100 hectare (2.2 million acre) block. Based on a Prospective Resource Assessment provided by Netherland Sewell & Associates, Inc. (see news release dated September 8, 2006), the co-venturers are targeting a potential multi-billion barrel oil and gas resource on Block 1711.