NORDIC IDENTIFIES FIRST TWO WELL LOCATIONS FOR PREECEVILLE DRILLING PROGRAM; WILL UNDERTAKE ADDITIONAL SEISMIC AND RECONNAISSANCE SOIL GAS SURVEYS

Nordic Oil & Gas Ltd. has selected two initial well locations to commence its drilling program in Preeceville, Sask., where it previously discovered numerous oil seeps. Furthermore, Donald Benson, the company's chairman and chief executive officer, also announced that Nordic will commence a new seismic program in the area, as soon as possible, and will also engage Petro-Find Geochem Ltd., the company hired by Nordic to undertake the initial hydrocarbon soil gas surveys in its two most northerly townships in Preeceville, and who made the discoveries of the oil seeps, to undertake additional reconnaissance soil gas surveys, to assess the magnitude and potential of the findings. These initiatives stem from meetings conducted last week by Mr. Benson with Nordic's geologist and geophysicist, and Paul Lafleur, PEng, president of Petro-Find. It was at this time that Mr. Lafleur also presented his full report on the geochemical soil gas surveys comprising 453 sample locations conducted in Township 40 Ranges 4W2 and 5W2, and 22 sample locations in an area surrounding the two adjacent wells in Township 39 Range 5W2. A summary of Mr. Lafleur's report on both townships accompanies this news release.

"One of the preliminary locations that we have identified for drilling was selected based on the Petro-Find Geochem report, while the other location was chosen based on a combination of our own previously secured seismic data and the Petro-Find Geochem report," Mr. Benson stated. "We will begin as soon as possible with the required environmental studies of both areas, following which we will apply for the necessary well licences. It is estimated that this should take between four to six weeks to complete. Concurrently, we will also be undertaking additional seismic work in the area where the oil seeps were discovered, and will also have Mr. Lafleur and his people working on reconnaissance soil gas surveys," he added.

Commenting on his company's report, Mr. Lafleur stated that the results were some of the highest readings he had ever seen: "In the course of the survey, some 34 oil seepage locations were found of which most were coincident with the soil gas anomalies. In Petro-Find's view, many, if not all, of the high-grade oil anomalies, especially those that are coincident with major oil seeps, warrant further exploration by drilling. The surface anomalies suggest both stratigraphic and structural oil traps. Many of the large anomalies are in a linear pattern, suggesting fault control; however, most of the anomalies have round or oval shapes and sharply defined borders, suggesting they are surface expressions of oil reservoirs associated with collapse structures," he added.

Nordic anticipates commencing drilling the two new wells before the end of the first quarter of 2008.

Highlights of Petro-Find geochem soil gas surveys

Township 40 Range 5W2

A soil gas geochemical survey comprising 453 sample locations, conducted in Township 40 Ranges 4W2 and 5W2, discovered about 30 high-grade oil anomalies and major fairways, as well as two natural gas anomalies. In the course of the survey about 34 oil seepage locations were found, most of which were found to be coincident with the soil gas anomalies. In Petro-Find's view, many, if not all, of the high-grade oil anomalies, especially those that are coincident with major oil seeps, warrant further exploration by drilling.

The surface anomalies suggest both stratigraphic and structural oil traps. Many of the large anomalies are in a linear pattern suggesting fault control. It is well known that the dissolution of salt beds in the Devonian can cause collapse and entrapment of oil in the Devonian and overlying formations, given the right conditions.

The extensive fairways of anomalous values, that appear to anastomose, represent the surface expressions of stratigraphic oil reservoirs in sand bars in a deltaic environment. The upper Mannville formation is the most likely prospect. It is reported that the cuttings from a well in a neighbouring property shows that the Mannville formation in this area is a well-sorted, porous and permeable sand, which could host oil and gas reservoirs.

The oil anomalies in the project area have low ratios of methane/ethane, indicating light oil and some condensate in the underlying oil reservoirs. The high intensity ultraviolet fluorescence of the oil seep samples indicates the underlying reservoirs, whether economic or not, may contain high aromatics (for example BTEX).

The major anomalies are extremely high-grade with ethane-plus values, ranging from 2.5 to 27 parts per million (270 times a background of 0.1 part per million). Drilling will be needed to substantiate the threshold value for commercial accumulations, but a soil gas anomaly of one part per million, in oil provinces elsewhere, is the usual cut-off point. Therefore, the long and wide fairways with values between one and 2.5 parts per million present a number of secondary targets. Many of the high-grade anomalies have been well-defined by high-density sampling.

Reconnaissance soil gas surveys are recommended to assess the oil and gas potential of the southeast quadrant of Township 40 Ranges 4W2 and 5W2, which was difficult to access, as well as the four remaining townships comprising Townships 39 and 38, Ranges 4W2 and 5W2. A winter program would present a major opportunity to conduct surveys in areas not accessible at any other time of the year because of extensive bogs and lack of logging trails. These surveys would be of the reconnaissance type to determine the likely areas for follow-up by high-density sampling.

A high-density survey is recommended to extend south the known anomalies and fairways in Township 40, to connect them with the oil anomaly and fairways discovered around the twinned wells. This survey should extend as far south as the Western Warner well, a distance of about four miles.

Section 34 Township 39 Range 5W2

Results indicate that the project area is oil-prone with the discovery of one oil anomaly immediately northeast of the wells that is coincident with two oil seeps. This anomaly may connect with a major fairway in Township 40. Also found were anomalous values of methane and ethane at the Western Warner Warman well site, suggesting the existence of a thermogenic gas reservoir at depth.

The soil gas survey surrounding the twinned wells shows the southern limit of a strong ethane-plus anomaly extending north-northeast. The two oil seeps are coincident with this anomaly which could extend a considerable distance along a fairway to join others in Township 40.

The one soil gas sample, taken at the Warner well head to the south, shows anomalous values for methane and ethane. A methane/ethane ratio of 17.6 indicates thermogenic natural gas at depth.

The linear relationship of the three seeps in this area and a major seep in Township 40 (No. 485), as well as the Warner well in Section 14, may indicate fault control.

The fact that the 2003 Warner well exhibited a high concentration of BTEX in the Mannville aquifer may indicate the existence of a major oil pool in the opposite direction of the water flow, probably east or northeast.

The first priority is to conduct a high-density soil gas survey in a three-mile-wide swath from Township 40, south to the Warner well in Section 14 of Township 39, a distance of about four miles. A winter program would extend south the known anomalies in Township 40, and define the oil anomaly and fairways discovered around the twinned wells. It also could provide the answer to why the two Warner wells were dry and what is the probable source of the gas produced from the 1936 well over a period of many years.

We seek Safe Harbor.