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NPC Announces Oil Production Increase in the Shukheir Bay Field

Production at the Shukheir Bay Field-6, located in the Shukheir Marine Gulf of Suez Concession, has increased by 1,700 barrels of oil per day (BOPD) from the Kareem sandstone

The National Petroleum Company (NPC), the upstream oil and gas Platform Company of Citadel Capital (CCAP.CA on the Egyptian Stock Exchange), the leading private equity firm in the Middle East and Africa, announced today that it has increased its production by 1,700 barrels of oil per day (BOPD) in the Sukheir Bay Field located approximately 125 km north of Hurghada on the western coast of the Red Sea. This development is expected to increase NPC's total daily oil production from its Shukheir Marine properties to 2800 BOPD.

NPC's concession operator, Offshore Shukheir Petroleum Co. Ltd (OSOCO), a joint venture company of NPC's Petzed Investment and Project Management Ltd and the Egyptian General Petroleum Company (EGPC) , successfully completed the drilling of the Shukheir Bay-6 well (SHB-6) to the Kareem reservoir in November 2010.

Production tests of two intervals totaling 15m of perforations in the virgin reservoir pressured Kareem sandstone has resulted in flow rates of 1,700 BOPD at a 0.5-inch choke size of 41 API crude with GOR of 750 SCF/BO. The open hole logs indicated new potential within the Kareem formation with a total of 18 meters of net sand with an average porosity of 18% and water saturation of 26%.

"Testing on the well, which was completed at the end of November, revealed an initial production rate of 1,700 BOPD of high-quality, sulfur-free 41 API crude," said Mohamed Farid, Chief Executive Officer at NPC. "We are very encouraged by these positive results and will continue conducting tests to further delineate the size of the reservoir and reserve volumes."

Additional reservoir modeling has also been initiated to address the possible extension of the Kareem and the confirmation of additional upside in the primary Lower Rudeis reservoir.

"If we continue to achieve positive results this may justify additional drilling to either or both horizons," added Farid.

NPC expects the SHB-6 well to continue to produce at an average rate of approximately 1,500 BOPD over the coming year. Production from SHB-6 will continue to be monitored over the coming period to confirm productivity and a potential increase in field reserves.

-Ends-

NPC is a Cairo-based upstream oil and gas exploration and production company with a MENA footprint. In 2006, NPC acquired 100% of Petzed, which controls the productive Shukheir marine concession of the Gamma and Shukheir Bay fields. Petzed holds two additional concessions in the Gulf of Suez, including South Abou Zneima and East Kheir and the North Maghara concession in northern Sinai. In 2007, together with a consortium of co-investors, NPC acquired 100% of Calgary-based Rally Energy, which has a 100% operating interest in the Issaran oilfield, a significant heavy oil development opportunity in Egypt. Rally also holds a 30% stake in the Safed Koh block in Pakistan, where it is participating in the development of a natural gas discovery. NPC is a Citadel Capital company with paid-up capital of US$ 425 million.

Citadel Capital (CCAP.CA on the Egyptian Stock Exchange) is the leading private equity firm in the Middle East and Africa. Citadel Capital focuses on building regional platforms in select industries through acquisitions, turnarounds, and greenfields executed via Opportunity-Specific Funds. The firm's 19 OSFs now control Platform Companies with investments worth more than US$ 8.6 billion in 14 countries spanning 15 industries, including mining, cement, transportation, food and energy. Since 2004, Citadel Capital has generated more than US$ 2.5 billion in cash returns to its co-investors and shareholders (on investments of US$ 650 million), more than any other private equity firm in the region. Citadel Capital is the largest private equity firm in Africa by PE assets under management (2005-2010, as ranked by Private Equity International). For more information, please visit www.citadelcapital.com.

For more information, please contact:
Ms. Ghada Hammouda
Head of Corporate Communications
Citadel Capital (S.A.E.)
ghammouda@citadelcapital.com
Tel: +20 2 2791-4440
Fax: +20 22 791-4448
Mobile: +20 16 662-0002

© Press Release 2010