Sky Petroleum Announces Drilling Rig Contract

1/18/2006, 10:00 AM (Source: GlobeNewswire)
Drilling Expected to Commence by the End of January 2006

AUSTIN, TX -- (MARKET WIRE) -- 01/18/06 -- Sky Petroleum, Inc. (OTC
BB: SKPI), an oil and gas exploration company, is pleased to announce
that Buttes Gas and Oil Co. International Inc. ("BGOI"), the operator
of the Mubarak Field, has signed a contract with P.T. Apexindo
Pratama Duta Tbk, the largest Indonesian oil and gas drilling
company, to drill the first of two obligation wells using the Rani
Woro jackup rig. The Rani Woro can operate to a water depth of 350
feet and has a 25,000 foot drilling capacity. The company expects
BGOI to begin initial drilling operations, or spudding the well,
prior to the end of January 2006.

On May 18, 2005, Sky Petroleum's wholly owned subsidiary, Sastaro
Limited ("Sastaro") entered into a Participation Agreement
("Agreement") with BGOI, a wholly owned subsidiary of Crescent
Petroleum Company International Limited ("Crescent"), allowing Sky
Petroleum to participate in two wells in the Mubarek Field, located
in the United Arab Emirates.

BGOI estimates that the first well, Mubarak H-2, will take
approximately 75 days to complete and results are anticipated prior
to the end of April 2006. The rig will then be moved off location to
another operator for one well and subject to the terms of the
Agreement, will return to the Mubarak Field in approximately six
months to drill and complete the Mubarak J-3 well. Sky Petroleum
expects the second obligation well will be completed prior to the end
of 2006.

On September 15, 2005 the company announced the target locations for
the infill wells to be drilled to the Ilam/Mishrif reservoir in the
Mubarek Field had been selected. The wells will be drilled from
existing platforms into the Ilam/Mishrif oil reservoir. The H-2 and
J-3 wells target locations are located approximately one kilometer
from wells which have produced oil from the Ilam/Mishrif. The field
has complete 3D seismic coverage and extensive production and export
infrastructure already in place with adequate capacity to process
production from the two new wells.

"We are very pleased that this critical step in securing a rig has
been completed by BGOI despite the tight supply of equipment," said
Brent Kinney, chief executive officer at Sky Petroleum, Inc. "We are
very excited about the potential of the Mubarek infill drilling
program and look forward to results."

The alliance with BGOI, a wholly owned subsidiary of 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 operator of the Mubarak Field
for over three decades, BGOI brings extensive knowledge of the
subsurface conditions of the Mubarek Field. The first commercial oil
was produced from the Mubarek Field in the mid 1970s and the field
has been in continuous production since then.

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. For
additional information please visit www.skypetroleum.com

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, the timing
and success of the proposed infill drilling programs, the
contemplated continued production at the Mubarek Field, and
anticipated production from the wells, if any, the competitive
environment within the oil and gas industry, the extent and cost
effectiveness with which Sky Petroleum is able to implement
exploration and development programs in 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.
Contact:
Michael Noonan
512-437-2582
mnoonan@skypete.com
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