Sky Petroleum Updates Activities on Albanian Exploration Blocks

Friday, Jul 30, 2010

Sky Petroleum, Inc. (OTCBB: SKPI), an oil and gas company, announces that it is finalizing the engagement of a firm to conduct a geophysical review of the seismic and log data for the three exploration blocks, Four, Five and Dumre. Additionally the firm will assist in determining financial strategies to best create shareholder value. The National Agency of Natural Resources of Albania (“AKBN”) has provided the company access to previous reserves studies including one prepared by OMV, Austria’s largest oil-producing, refining and retail operating company.

To date, there have been more than ten identified prospects including three significant evaluation wells in each block which are as follows; Palokastra well Block Four, Kanina well in Block Five, and a Dumrea well that helps to define the potential of the assets. Sky Petroleum has been granted exclusive rights under the Production Sharing Contract (“PSC”) to three exploration blocks totaling approximately 5,000 km² (1.2 million acres), representing approximately 20% of the landmass of Albania. In addition to the exploration rights, the company will also have access to more than 1,200 km of 2-D seismic data.

Exploration Blocks Four, Five, and Dumre

The PSC has a seven-year term with three exploration periods. Upon commercial discovery of gas, the agreement allows for development and production periods of 25 years plus extensions at the Company’s option.

Block Four is located in southeast Albania, bordering on Greece. The exploration block covers an area of approximately 2,264 km² (540,000 acres). The area has four identified leads and prospects on the block with a total estimated reserve potential of 350 MMBOE.

Block Five is located in southwest Albania next to the Adriatic Sea and covers an area of approximately 2,076 km² (498,000 acres). The block has a total of five identified prospects or leads with a total estimated reserve potential of 375 MMBOE.

Block Dumre is located immediately north of the Kucova oil field and covers an area of approximately 623 km² (149,000 acres). Based on analogous discoveries, it is estimated that the Dumre prospect contains approximately 500 to 700 MMBOE OOIP.

About the Republic of Albania

Albania has a population of 3.5 million people and is located 50 km east of Italy, across the Adriatic Sea in Southeast Europe. Albania is a member of NATO, and has applied to join the European Union. Albania is a proven hydrocarbon producing region with earliest known bitumen production dating back to the Roman Empire. Modern exploration began in the early 1900s. The Patmos – Marinza and Kucova heavy oilfields are among the largest oilfields in Europe. To date there have been ten significant field discoveries that have produced more than 150 million barrels.

Source: Business Wire