Sky Petroleum Updates Drilling Plans on Second Mubarek Well

9/19/2006, 6:54 PM (Source: GlobeNewswire)



Drilling Rig Expected to Return to the Mubarek Field in Early
November

AUSTIN, TX -- (MARKET WIRE) -- September 19, 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
drilling plans for the second well at the Mubarek Field.

Sky Petroleum and Crescent Petroleum Company International Limited
("Crescent"), the operator of the Mubarek Field, announces that the
Rani Woro jackup rig, currently drilling for another operator, is
expected to return to the field around November 1, 2006. This date is
approximately 45 days later than originally anticipated due to
operational delays with the current operator. Earlier this year,
Crescent signed a contract with P.T. Apexindo Pratama Duta Tbk, the
largest Indonesian oil and gas drilling company, to drill the 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.

As announced on July 26, 2006 Sky Petroleum and Crescent have agreed
on a second well location to be drilled to the Ilam/Mishrif
reservoir. The data from the first well, Mubarek H2, allowed an up to
date assessment of the factors affecting reservoir performance in
this mature field which indicated that the proposed J3 location
should be reconsidered. The second well, designated Mubarek K2-ST3,
will now be drilled on the northwest of the field proximal to the
Mubarek K1 well location. K1 was drilled as Thamama producer (a
deeper gas condensate reservoir underlying the Ilam/Mishrif) and
electric log readings over the Ilam/Mishrif section indicate good oil
saturated reservoir.

Crescent has also continued evaluating the H2 well. Following a
review of the results of the Memory Production "MPLT" data, Crescent
plans to carry out wireline work on the H2 well within the coming
weeks. The objective will be to set a bridge plug to isolate
perforations which appear to be producing water and no oil. In
addition the planned alterations to the gas lift system in the well
are anticipated to enable an increase in oil production from the
well. After observing the well's performance as a result of this
configuration change Crescent will evaluate whether a re-stimulation
program of the zones in the Ilam section should be carried out.
During August the oil production from the H2 well averaged
approximately 200 bopd with an average water cut of 90%.

"We continue to generate revenues of approximately $200,000 per month
and believe we will see improved income from the Mubarek Field when
both wells are on production," said Brent Kinney, chief executive
officer of Sky Petroleum, Inc. "We are also continuing to look at
other oil and gas opportunities that will add shareholder value."

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 that
the second obligation well, which will spud in the fourth quarter of
2006 will be completed within 45 days. On completion of the two
obligation wells a further well development program will be
evaluated. Sky Petroleum believes that there is potential for
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.


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


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