Sky Petroleum Announces 25,000 Barrels of Oil Produced

10/16/2006, 10:00 AM (Source: GlobeNewswire)



Receiving Revenue From Mubarek H2 Well Production

AUSTIN, TX -- (MARKET WIRE) -- 10/16/06 -- Sky Petroleum, Inc.
(OTCBB: SKPI), an oil and gas company with a development project in
the United Arab Emirates, is pleased to announce that as of September
30, 2006, the Mubarek H2 well has produced 24,998 barrels of oil
since it went into production on May 16, 2006. The company also
announces that it will receive USD 588,356.00 from its first
allocation of production revenue from the H2 well. The proceeds
represent the sale of 15,873 barrels of oil net to Sky Petroleum at a
net back to the wellhead price of USD 61.59 per barrel. The revenue
will be received in mid-October 2006, or approximately 40 days from
the first lifting of crude from the H2 well, which occurred on
September 11, 2006. As of September 30, 2006, 9,125 barrels of oil
net to Sky Petroleum were on the storage vessel Mubaraka.

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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