Sky Petroleum Updates Progress on the Mubarek H2 Well

6/21/2006, 10:00 AM (Source: GlobeNewswire)



Operator Working on Well to Enhance Production
AUSTIN, TX -- (MARKET WIRE) -- 06/21/2006 -- Sky Petroleum, Inc.
(OTCBB: SKPI), an oil and gas company with a development project in
the United Arab Emirates, is pleased to provide an update on the
Mubarek H2 well and related activities under its Participation
Agreement.

Crescent Petroleum Company International Limited ("Crescent"), the
operator of the Mubarek Field, has been testing the H2 well over
recent weeks and reports it has completed an analysis of the well
performance. As a result, the gas lift design will be adjusted
following which production logging will be carried out on the well.
Additional analysis of the gas lift design based on actual well
conditions, rather than the design assumptions used before drilling,
demonstrated the need to adjust the design. It is expected this will
solve the well stability problems and enable injection of increased
volumes of gas, and potentially could lead to improvements in the
production rate of the well.

Following this, a wire-line unit will be used to carry out a Memory
Production "MPLT" logging run. This will identify which zones are
producing and determine the actual operating condition of the well in
terms of pressure, temperature and gas lift valve performance. A
further recalculation of the gas lift design will then be carried out
and valves will be reset if necessary. Reservoir engineers will also
evaluate the results of the MPLT and make recommendations for further
work in the well as may be prudent, such as a re-stimulation of any
tight zones.

"Crescent's evaluation and testing of the H2 well continues in an
effort to stabilize it and maximize production. In parallel Sky is
undertaking their own studies to re-evaluate the selection of the
target for the second Mubarek well, for which funding has been paid,"
said Brent Kinney, Chief Executive Officer of Sky Petroleum, Inc. "In
addition, we are constantly looking at additional oil and gas
opportunities that fit our corporate strategy."

Mubarek Field Program

The Participation Agreement with Crescent gives Sky Petroleum the
right to participate in a share of the future production revenue by
contributing up to $25 million in drilling and completion costs
related to two obligation wells in the Mubarek Field, offshore United
Arab Emirates. The $25 million commitment for both wells was fully
paid by the end of the first quarter of 2006. It is anticipated the
second obligation well will spud in the third quarter of 2006 and be
completed within 90 days. On completion of the two obligation wells a
further well development program will be evaluated. Sky Petroleum
believes that there is potential for 4 additional wells to be drilled
and anticipates production from these wells to commence in late 2007
or 2008 subject to a positive evaluation and rig availability.

About Sky Petroleum

Sky Petroleum (OTCBB: SKPI) is an oil and gas exploration 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 ability
to stabilize the surging of the well, the ability to shut off zones
which are producing water, the ability to carry out additional
stimulation of the zones producing oil, the accuracy of estimated
production rates and the price of crude oil, the accuracy of
operating costs and monthly revenue forecasts, the timing and success
of other proposed infill drilling programs, the contemplated
continued production at the Mubarek Field, 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.




Investor Contact:
Michael Noonan
512-687-3427
mnoonan@skypete.com

Media Contact:
Clint Woods
713-627-2223
cwoods@piercom.com


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