Verenex Energy Inc. - Libya operational update



    CALGARY, Jan. 28 /CNW/ - Verenex Energy Inc. ("Verenex" or the "Company")
(TSX - VNX) is pleased to provide an update of its operations in Libya and
advise that its first appraisal well A2-47/02 has confirmed the potential of a
large hydrocarbon trap in the Lower Acacus Formation in the south western part
of Area 47 that could be controlled both structurally and stratigraphically.
This is a significant development and reinforces the possibility of both
structural and stratigraphic play types in Area 47, increasing the exploration
potential on the block.
    Since acquiring exploration rights to Area 47 in 2005, drilling results
have exceeded the Company's expectations. Verenex has drilled and cased six
new field wildcat ("NFW") exploration wells and two appraisal wells. Six of
these wells have been fully tested at a maximum aggregate flow rate, as
restricted by test equipment capability, of greater than 75,000 barrels of oil
per day ("bopd") (gross) through choke sizes on particular wells and reservoir
intervals ranging from 32/64ths to 128/64ths inch. Flow testing of a seventh
well has recently been completed and results will be released following review
and approval by the NOC.
    The prospect and lead inventory in Area 47 stands at more than
45 opportunities, which is expected to grow in 2008 as interpreted results are
incorporated from additional 3D seismic shot in 2007 and additional 2D seismic
currently being shot.

    APPRAISAL DRILLING UNDERWAY TO DEFINE RE

SOURCES AND SUPPORT COMMERCIALITY APPLICATION In parallel with an aggressive exploration program in Area 47 to maximize resource capture during the five-year exploration phase of the EPSA contract, the Company is progressing selective appraisal drilling to confirm the extent of the resources discovered in the southern part of Area 47 and to support the submission of a commerciality application targeted for mid-2008. A2-47/02 Appraisal Well Successfully Flow Tested Verenex has completed flow testing at its first appraisal well A2-47/02, which was drilled to appraise the Company's first oil discovery A1-47/02 located 5.1 kilometres to the east. The A2-47/02 well was drilled to a depth of 10,400 feet with the KCA DEUTAG T-19 Drilling Rig, which was also utilized to test the well. The A2-47/02 well was drilled on the crest of a Lower Acacus structure which was mapped at a subsea depth approximately 100 feet deeper than the structure at the A1-47/02 discovery. The A2-47/02 well was targeting to find oil in the structure and oil water contacts, particularly in the basal sands in the Lower Acacus Formation which appear as continuous from 3D seismic and well control in the area. The Company carried out extended flow tests from two sand intervals near the base of the Lower Acacus Formation. The properties of the oil found in the lowest interval at the A2-47/02 well are essentially the same as those of the oil found in this same interval in the A1-47/02 well. Pressure gradients also align, indicating a common fluid system. The flow tests, logs and other formation evaluation results indicate that the A2-47/02 well has intersected water oil contacts in each of two basal sands in the Lower Acacus Formation that were oil filled in the A1-47/02 well, indicating a discovered oil column of approximately 158 feet in the deepest sand and 106 feet in the second sand. The water oil contacts are at subsea depths below the mapped structural spill point in the structures found at A1 and A2-47/02. This is a significant result and confirms the possibility of a stratigraphic component to the hydrocarbon trap and a potentially large oil accumulation encompassing previously mapped stand-alone structural prospects at the A1-47/02 and A2-47/02 wells, and an un-drilled prospect between these two wells. The results at A2-47/02 provide the first clear evidence of the possibility for both structural and stratigraphic play types in Area 47 which increases the exploration potential on the block. More detailed processing of the South 3D seismic in the area is underway to help map the extent and continuity of the reservoir sands to confirm the full extent of the oil accumulations found by the A1, A2 and F1-47/02 wells and the potential resources in other prospects in the area. In addition, new dense grid 2D seismic is currently being shot around the South 3D seismic area which is expected to identify additional drillable prospects and a potential extension to the trap defined by the A1 and A2-47/02 wells. "The success at the A2-47/02 appraisal well is an exciting new development, indicating the possibility of a stratigraphic component to the accumulation found by the A1-47/02 oil discovery well, which increases the exploration potential in Area 47", said Jim McFarland, President and CEO of Verenex Energy Inc. "Drilling results have exceeded our expectations, confirming the presence of significant light sweet crude oil resources in structural and possible stratigraphic play types in prolific sandstone reservoirs in the Lower Acacus Formation, our primary exploration target, as well as additional light oil resources in secondary exploration targets in the Middle and Upper Acacus and Aouinet Ouenine Formations. We are expecting to complete a comprehensive third party assessment of the resource potential in Area 47 by the end of the first quarter of 2008 which will provide additional visibility to the extent of our accomplishment", he said. A3-47/02 Appraisal Well Expected to Spud in Early February The Company proposed and the NOC approved a second appraisal well A3-47/02 to further delineate the stacked reservoirs in the A1-47/02 oil discovery, particularly the upper sands in the Lower Acacus Formation. The well is located approximately 1.5 kilometres southwest of the A1-47/02 well and 4.0 kilometres southeast of the A2-47/02 well and is expected to spud in early February with the KCA DEUTAG T-19 Drilling Rig. D2-47/02 Appraisal Well Drilled and Cased Verenex has drilled, cored, logged and cased an appraisal well at D2-47/02 to appraise the extent of the Company's fourth oil discovery D1-47/02 located 1.5 kilometres to the northeast which flow tested at 7,742 bopd. The well is located on a 2D seismic line acquired by Verenex in 2006 which traverses the D1-47/02 well. The D2-47/02 well spudded on December 13 with Ensign Rig 28 and was drilled to a depth of 9,850 feet. The timeline from spud to rig release was 41 days. Based on the results from the logs, cores, pressure gradients and fluid samples it appears that the D2-47/02 well intersected a water oil contact at or near the top of the thick sand encountered at the base of the Lower Acacus Formation. This sand correlates with the same sand tested in the D1-47/02 well, which was completely filled with oil and a condensate/liquids-rich gas cap. This result indicates a discovered oil and condensate/liquids rich gas column of approximately 107 feet. The D2-47/02 well has served a key objective of defining the water oil contact and delineating the structure discovered by the D1-47/02 well. Given the thin extent of the oil zone overlying the water oil contact, the well will not be tested and will be suspended as a future water injection well. Further potential appraisal drilling in the area encompassing the B1, C1, D1, D2 and E1-47/02 wells will await the interpreted results from the 3D seismic shot in 2007. EXPLORATION DRILLING SET TO RESUME E1-47/02 NFW Exploration Well Fully Tested The E1-47/02 NFW exploration well was drilled in August and September 2007 based on 2D seismic acquired in 2006. It is the most easterly well drilled by the Company in Area 47 and is located about 17.5 kilometres northeast of the D1-47/02 oil discovery, the nearest well. The well was cased based on indicated hydrocarbons in the Lower Acacus Formation from logs and other formation evaluation results. Flow testing of the E1-47/02 well with the service rig was delayed until December 2007 due to the prolonged "fishing" operations at the D1-47/02 well. The Company recently completed testing at E1 and the well flowed light sweet crude oil from an 11 foot interval in the Lower Acacus Formation. Details of this flow test will be released once the results are reviewed and approved by the NOC. 2007 East 3D Seismic Completed The acquisition phase of the 1,225 square kilometre 3D seismic survey in the eastern part of Area 47 was completed in December 2007. This increases the total 3D seismic acquired by Verenex to 1,705 square kilometres covering 28% of Area 47. The results are expected to mature and expand the Company's exploration prospect and lead inventory, improve subsurface imaging, guide NFW exploration drilling and provide support to the appraisal drilling and acreage retention strategy in this part of Area 47. Fast-track processing and interpretation of the initial northern section of the East 3D survey (approximately 40% of the total) has been completed. It is expected that the Company's next NFW exploration well will be drilled in this northern area with Ensign Rig 28 in February 2008, subject to NOC approval. The entire East 3D seismic survey is expected to be processed and interpreted by the end of the second quarter of 2008. 2008 South 2D Seismic Program Underway The Company has commenced its 2008 seismic program consisting of 2,400 kilometres of 2D in the southern half of Area 47. This will increase the total 2D seismic acquired by Verenex to 4,110 kilometres. The 2D seismic will cover areas adjacent to the South 3D seismic survey shot in 2006 and in other areas with limited seismic control including the "panhandle" section of the block which contains a number of exploration leads. The 2D program is proceeding very well with 50% of the surveying and 35% of the acquisition completed to date. The Company is utilizing the same Agesco seismic crew which carried out the 3D survey in 2007. THIRD PARTY RE

SOURCE ASSESSMENT UNDERWAY A comprehensive third party assessment of contingent (discovered) and prospective (undiscovered) resources in Area 47 is underway to support both corporate valuations and a commerciality application for an initial phase of production. The Company is expecting to complete this resource assessment by the end of the first quarter of 2008. DEVELOPMENT PLAN ADVANCING FOR FIRST OIL TARGET AT END-2009 The Company has submitted preliminary appraisal reports to the Area 47 Management Committee and the NOC for oil discoveries at A1, B1, C1 and D1-47/02. Reports for E1 and F1 are currently being prepared. Completion of the appraisal programs contemplated in the preliminary appraisal reports will clear the way for submission of a commerciality application, which is targeted for the middle of 2008. This is the first step to advance a development project. The southern part of Area 47, including the area encompassed by the South 3D seismic and the areas immediately to the east, is contemplated as the core for an initial production phase of up to 50,000 bopd (gross) by the end of 2009. Verenex has drilled and cased seven potential production wells and one potential injection well to date in these areas. It is expected that additional production phases would be advanced with further exploration success. The Company has issued a request for tenders for the Front End Engineering and Design ("FEED") for the gathering lines, export pipeline and processing facilities for the initial phase of production and expects to award FEED contracts in February. The results from the FEED work will be incorporated in the commerciality application. Verenex is a Canada-based, international oil and gas exploration and production company with a world-class exploration portfolio in the Ghadames Basin in Libya. Verenex is the operator and holds a 50% working interest in Area 47 in Libya. Under the EPSA terms for Area 47, Verenex would receive an initial production allocation (free of all taxes and royalties) of 6.85% in any commercial development scheme. A more complete description of the Area 47 contract terms is included in the Company's various filings on www.sedar.com. This press release contains forward-looking statements, including but not limited to operational information, future exploration and development plans and anticipated future production. These statements are based on current expectations and are subject to a number of risks and uncertainties that could materially affect the results. These risks include, but are not limited to: financing risks; geological risks; drilling risks; risks associated with obtaining regulatory approvals; oil and gas industry operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the ability to attract and retain key personnel; the risk of commodity price and foreign exchange rate fluctuations; the uncertainty associated with negotiating with governments; and the risk associated with international activity. Due to the risks, uncertainties and assumptions inherent in forward-looking statements, prospective investors in the company's securities should not place undue reliance on these forward-looking statements. %SEDAR: 00020996E

For further information:

For further information: Jim McFarland, President & CEO, Verenex Energy
Inc., Telephone: (403) 536-8009; or Ken Hillier, Chief Financial Officer,
Verenex Energy Inc., Telephone: (403) 536-8005, www.verenexenergy.com

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VERENEX ENERGY INC.

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