Abacan Resource Corp. announces results at NGO No. 5 well

Business Wire, March 22, 1995

CALGARY, Alberta--(BUSINESS WIRE)--MARCH 22, 1995--Abacan Resource Corp. (Alberta Stock Exchange:ABC) ("The Corporation") is pleased to announce the results of its NGO No. 5 well, offshore Nigeria, West Africa on Concession Block OPL 469 and also the terms of two private placement financings for approximate proceeds of $20,000,000.

NGO No. 5 TEST RESULTS

The NGO No. 5 well flow tested 19,000 cumulative measured barrels per day of Oil and Condensate, with associated gas from four separate send intervals on choke sizes ranging from 48/64 to 64/64.

The NGO No. 5 well was Abacan's third well to be drilled on the NGO structure on OPL 469. The reservoirs encountered proved to be correlative and continuous over the NGO structure.

The NGO No. 5 well was directionally drilled to a true vertical depth of 11.450 feet, west of the NGO No. 3 discovery well drilled in June 1994.

A new hydrocarbon zone was tested in the NGO No. 5 well with initial test results being very positive. After detailed log analysis, this zone has been identified in the NGO No. 3 well. Testing operations will commence on this zone in the NGO No. 3 well this week, which could add significant reserves to the NGO field.

The development well, NGO No. 6, will commence drilling after testing operations are completed on the NGO No. 3 well. The NGO No. 6 well will be directionally drilled to the east of the NGO No. 3 well on Concession OPL 237, which is estimated to contain more than one half of the reserves on the NGO structure. The NGO structure straddles both OPL's 469 and 237.

Abacan is extremely pleased with the results from the NGO No. 5 well. Various production facilities have been researched and operations have been initiated to bring the field on production in the shortest possible time frame.

PRIVATE PLACEMENT FINANCINGS

The Corporation also announces a financing of approximately $20,000,000 by the issuance of Special Warrants and Redeemable Convertible Debentures/Royalties. Midland Walwyn Capital Inc. is acting as the lead agent in respect of these financings.

The breakdown of the financings is as follows:

1. Two Convertible Redeemable Debentures/Royalty Agreements (the "Debentures") for total proceeds of $5,417,000. This private placement has now closed and the proceeds have been used by the Corporation to satisfy costs incurred in respect of the drilling on the OPL 469 Concession Block.

2. The balance of the financing by the issuance of Special Warrants at a price of $2.50 per Special Warrant. Each Special Warrant entitles the holder to acquire one common share of the Corporation without additional consideration. The closing of the Special Warrant Private Placement is expected to occur during the week of March 27, 1995. The proceeds of the Special Warrant Private Placement are intended to be used by the Corporation to fund its ongoing exploration and development program upon the OPL 469 and OPL 237 Concession Blocks located in Nigeria, Africa.

The Debentures bear interest at a rate of 10 percent per annum and are convertible into common shares of the Corporation by the holders on January 1, 1996 or January 1, 1997 at a conversion price of $3.00 and $3.50 per common share respectively. After the repayment of the principal amount under the Debentures, the holders will receive a minor sliding scale royalty to be paid out of production from the OPL 469 and OPL 237 Concession Blocks. The maximum aggregate royalty payment payable by the Corporation is $0.022 ($US) per barrel. The Corporation may redeem both the principal amount of the Debenture and the royalty interest at any time upon payment of a penalty.

The Corporation also announces the appointment of Gordon Singer, C.A. as its Chief Financial Officer. Mr. Singer brings with him 15 years of international oil and gas experience, most recently as Vice President of Finance with a major Canadian international public oil and gas corporation.

THE ALBERTA STOCK EXCHANGE NEITHER APPROVES NOR DISAPPROVES OF THE INFORMATION CONTAINED HEREIN.

CONTACT: Wade G. Cherwayko or Ms. Lon Boshouwers,

(403) 262-1220