PRD Energy Announces Operational Update - Seite 2

Regulatory Affairs/Volkensen/Sittensen

The Company is seeking regulatory approval for its Volkensen development plans and has recently received regulatory approval for the Sittensen 3D shoot. During November, 2014, the Company met with its principal regulator to discuss concerns around the predictability of timing for permitting in relation to its current and future projects. The regulator has agreed to work with the Company to provide clarity and predictability to permitting timeframes. The Company believes that enacting a more expeditious and streamlined regulatory process would enhance its prospects for 2015 and beyond.

The Volkensen development permit was submitted in August, 2014. As a result of additional data and information requests from the regulator there have been a number of delays in the permitting process. The Company does not believe that these delays are indicative of the likelihood to receive permits, as they are procedural in nature and are not in relation to public feedback or concerns about the project. The Company has revised its expectations as to timing for field activities and estimates site construction and drilling to start in early second quarter of 2015. The Company has been granted an extension until April 30, 2015 to commence site activities at Volkensen with a further extension expected to be granted to accommodate the Company's proposed drilling program. The Company is now planning on drilling a vertical/deviated well off the proposed well-site pad to evaluate the downhole drilling conditions and reservoir parameters in the Volkensen pool prior to horizontal development. The Company is planning on cutting core, taking pressure measurements and evaluating the reservoirs with modern geophysical logs. These results, combined with the results of the Sittensen 3D seismic program (which covers a portion of the Volkensen licences) will further reduce the operational and production risks for future pool developments in both the Volkensen and Sittensen licences.

The Sittensen 3D seismic shoot permit was issued by the regulator on November 19, 2014, and is subject to certain customary conditions. We are very pleased by the shortened length of time for the issuance of this permit, being less than six months. The Company anticipates starting the shoot in the first quarter, 2015 conditional on being granted land access by certain land owners. If seasonal surface access issues prevent the shoot from being commenced in the first quarter of 2015, the next earliest opportunity to conduct the seismic shoot will be in the second half, 2015. The Company has reduced the seismic area to 70 square kilometers from 90 square kilometers to take into consideration community concerns. The reduction in size will reduce the total cost without compromising the development and exploration opportunity being targeted by the shoot. As a result, the shoot is expected to cost approximately $4,500,000 compared to the previously disclosed $5,000,000 expected procurement cost.