MEDIA RELEASE CONTACT: SOVEREIGN ANNOUNCES SUCCESSFUL COMPLETION OF PHASE ONE EXPLORATION AND APPRAISAL DRILLING PROGRAM FOR THE OKWOK FIELD BY ORIENTAL AND ADDAX PETROLEUM Houston, October 30, 2006: Sovereign Oil & Gas Company II, LLC ("Sovereign") today announced that its Nigerian business associate Oriental Energy Resources Limited ("Oriental") has successfully concluded its Phase One Appraisal and Exploratory Drilling Program for the Okwok Marginal Field located in Oil Mining Lease (OML) 67, which Oriental operates under a farmin agreement with ExxonMobil and the Nigerian National Petroleum Corporation (the "Farmors") that was executed on May 9, 2006. The Okwok Field is located twenty-five miles (40 km) offshore in Nigeria's prolific southeastern producing area (see map) in an average water depth of 150 feet. Oriental is joined in the project by Addax Petroleum (Offshore Nigeria) Limited ("Addax"), acting as Technical Advisor to Oriental, whose 40% participation interest was approved by the Nigerian government on June 27, 2006. Addax is the Operator of the adjacent OML 123, currently producing in excess of 50,000 barrels of oil per day, and located immediately north of the Okwok Field. Oriental and Addax spudded their first appraisal well in the Okwok Field on July 1, 2006, three days after receiving Government and Farmor approval to commence drilling operations. Sovereign played a pivotal role in obtaining the farmin for Oriental, drafting the original 2001 petition to Government that resulted in the award of the exclusive negotiating rights to Oriental of the Okwok and Ebok Fields in OML 67 under Marginal Field rules, conducting the four and one half year farmin negotiations with ExxonMobil for the Okwok Field, and negotiating the farmin of Adddax Petroleum into the Okwok Field project. Sovereign continues to serve as Oriental's upstream advisor while it builds its internal capacity as a leading Nigerian independent oil operator. Sovereign's Chairman and CEO, J. M. (Joe) Bruso, Jr. said "Sovereign is extremely pleased to have made a material contribution to Oriental and Addax's successful conclusion of Phase One of the Okwok Field Appraisal Drilling Program. Our experience drilling numerous wells in the Equatorial Guinea – Nigeria border area, including the Zafiro Field, gave us the insight to provide material guidance to the planning of the Okwok Field Phase One Appraisal and Development Program. We are especially encouraged by the presence of light sweet crude oil tested in the main objective "Lower D Sand" reservoir sequence. We believe the Okwok Field has the potential to be a significant oil field, both in the proven Lower D Sand interval, but also in the deeper Qua Iboe and Isongo intervals that produce prolifically in the Okwok Field area. We look forward to the next phase of appraisal drilling in 2007, and are confident that Oriental and Addax will confirm sufficient reserves to justify a commercial development. Our congratulations go out to the Okwok Asset teams of both companies for the rapid progress and excellent cooperation they have displayed in conducting their 2006 Appraisal and Exploration Drilling Program. Their having drilled four wells in the first four months of the contract speaks volumes about their ability to hit the ground running and to move forward with an aggressive appraisal and exploration program." The Okwok Field was discovered and partially appraised by three wells (Okwok 1-3) drilled by a previous operator in 1967-68, but those wells were not production tested. Based on 3D seismic mapping the Okwok Field is subdivided into three main fault blocks, named Block 1, Block 2, and Block 3. The main reservoir objectives are a series of stacked Plio-Pleistocene age sandstones, known locally as the "Lower D Sands", that are found in Okwok Field at a drill depth of between 3,000 feet to 4,000 feet subsea. The Oriental-Addax Okwok Phase One Drilling Program included the drilling of four wells using the GSF High Island IX drilling rig: the Okwok-4A and Okwok-4AST1 appraisal wells in Block 2, which contains the previously drilled Okwok-2 well, and the Okwok-7A and Okwok-8A in Block 3. The Okwok-4A encountered thinner than expected pay sands in multiple zones within the Lower D Sand interval, and was not flow tested. The Okwok-4AST1 encountered 95 feet of net oil pay in two intervals within the Lower D sand sequence and flowed 32° API gravity crude oil and minor amounts of gas during a cased-hole drill stem test, but the test was terminated during the initial flow period due to a mechanical failure of the sand exclusion screen in the perforated interval. A maximum 400 bopd rate was recorded before the test equipment failed. Block 3 had not been previously drilled, so the Okwok-7A and Okwok-8A were drilled as exploratory tests that confirmed 37° API gravity and 26°API gravity crude oil respectively in overpressured reservoir sands. The overpressured reservoirs and unconsolidated sands encountered in the main objective intervals in both Block 2 and Block 3 presented significant challenges to the drilling and completion of these wells. Mechanical failures of the wireline and downhole test equipment occurred in the Okwok-4A and Okwok-4AST1 wells, and as a result it was not possible to accurately measure the net oil pay thickness of the Okwok-4A or to measure the true flow potential of the Okwok-4AST1. The Okwok-7A well encountered even higher overpressured sands in Block 3 than those seen in Block 2, and recovered forty-two barrels of 37° API gravity crude oil from the Lower D Sand interval before abnormally high pressures forced the plugging and abandonment of the well for mechanical reasons. The replacement well, Okwok-8A, logged 97 feet of Lower D Sand net oil pay in two zones, and the interval was gravelpacked as a sand control measure before being production tested. The Okwok 8-A flowed at the rate of 1,222 bopd of 26° API gravity from these zones, a different reservoir than that which flowed 37° API gravity oil in the Okwok-7A well. Both the Okwok-4AST1 and the Okwok-8A wells are currently suspended as future production wells for eventual tie-back to production facilities. Oriental and Addax are now in the process of incorporating the well data, oil properties and flow test data from the Phase One Exploration and Appraisal Program into their existing subsurface and engineering models. The new information will be used in the design of the 2007 Okwok work program which is expected to include further appraisal drilling and potentially fast-track development planning. Should the 2007 appraisal program be successful, the Okwok Field would likely be initially developed through the OML123 FPSO located 12 km to the north. First commercial oil production could commence by early 2008. Oriental Energy Resources Limited is a privately held, Nigerian oil exploration and production company with its headquarters in Abuja, the Federal capital of Nigeria. In addition to the Okwok Field, Oriental is the Operator of OML 115, an oil mining lease located near Okwok in southeastern offshore Nigeria. Sovereign Oil & Gas Company II, LLC is a Houston-based international upstream project developer with world-wide experience specializing in West Africa. Sovereign has completed eleven major upstream property transactions in the Gulf of Guinea in recent years involving bonuses and work commitments in excess of US$400 million, with a focus on assisting local upstream asset owners in Nigeria obtain partners and financing. For further information visit the company's website at www.sovereignoil.com, Certain statements in this media release, other than historical information, may be regarded as "forward-looking statements". As such, they are subject to various risks and uncertainties, such as the timely completion, cost and result of exploration, appraisal, and development activities, the results of seismic, wireline logging and other testing methods, and estimates of underground accumulations of oil and gas. Actual results may vary. MAP OF OKWOK FIELD AREA, OFFSHORE NIGERIA
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