C.A.T. oil AG expands into geotechnical services

C.A.T. oil AG (O2C, ISIN: AT0000A00Y78), one of the leading providers of oil and gasfield services in Russia and Kazakhstan, today announced the formation of a new subsidiary, CAToil-Geodata. C.A.T. oil AG hires a technical and management team of 90 people from the Russian independent private service company Geodata Consulting to diversify into new products and to provide its customers with integrated reservoir engineering solutions and exploration services.

Geodata Consulting was established in 1997 to provide high quality geotechnical services to Russian and international oil and gas companies and promptly became a visible player in the Russian geoservice market. Its highly skilled technical team possesses strong expertise in reservoir engineering, complex geologic and reservoir modeling as well as seismic data processing, interpretation and reservoir characterization. Geodata’s core specialty also includes appraisal of oil and gas reserves and preparation of field development plans for approval by Russian authorities.

Geodata specialists’ successful 10-year track record covers more than 120 consultancy projects in Russia and abroad. These include reserves appraisal and development plans for high profile Russian projects such as Kovykta, Sugmut, Kharyaga, Varyogan, Vanyogan and other fields, with total reserves in excess of 4.5 bn bbl-oil and 100 tcf-gas, and more than 20 reservoir characterization and reservoir modeling projects in Mexico, Argentina, Nigeria and India.

Geodata Consulting’s personnel has also developed proficiency in field seismic data acquisition since 2003, when the company launched a 3-year 750 sq. km 3D onshore seismic project for Oil India in Assam. Furthermore, it accomplished a number of successful 3D and 2D seismic projects in India, Columbia and Russia, including West and East Siberia.

Despite successful 10 years on the Russian geoservice market, the move of Geodata Consulting’s management, which controlled the company, has been triggered by small companies' limited access to capital and growth opportunities, as well as the intensified sector competition in the wake of the Russian oilfield service industry consolidation. Employment with C.A.T. oil AG, a public oilfield service company, fuels the confidence of Geodata Consulting’s management and technical teams in sustainable realization of their strong expertise and business potential amid challenging market environment.

The business plan for the Group’s new company CAToil-Geodata envisages the mobilization of 5 to 6 new 3D/2D seismic crews for the 2007/08 winter season in Russia and abroad with a view of expanding the total number of seismic crews to 12 during the 2009/10 winter season. CAToil-Geodata’s total capital expenditure and working capital requirements for the years 2007 to 2010 stand at EUR 27.5 million to attain strong organic growth across seismic and reservoir engineering businesses.

“We are excited about this unique opportunity to hire Geodata’s highly visible geotechnical team and leverage its strong reservoir engineering and seismic expertise with our client relations and financial strength and welcome our new colleagues to the Group. C.A.T. oil AG is fully committed to meeting customers’ growing needs for integrated services through a product diversification and exposure to early stages of oil and gas fields’ life cycle such as exploration, appraisal and development planning. Separately, our core fracturing and fast growing sidetrack drilling operations should hugely benefit from the new team’s qualifications, which will be shared by our core subsidiaries CATOBNEFT and CATKoneft for a thorough selection of candidate wells,” said Leonid Mirzoyan, Company’s Chief Corporate Finance Officer.

About C.A.T. oil AG:  Austria-based C.A.T. oil AG (O2C, ISIN: AT0000A00Y78) is one of the leading providers of oil-and gasfield services in Russia and Kazakhstan. C.A.T. oil’s core business is hydraulic fracturing, a process which helps to open up oil-and gas-bearing rock formations in order to increase or even enable oil and gas production. The C.A.T. oil crews use state-of-the-art methods and technologies to generate high pressure in the oil or gas reservoirs concerned. This pressure causes cracks to appear in the rock through which oil or gas can be produced in larger quantities from the production well, and hence efficiently boosts extraction, particularly in the case of deposits that are difficult to develop or low-output wells. In addition, hydraulic fracturing can be used to revitalize wells that have previously been idle.

The Company has its headquarters Vienna and employed 2,657 people at the end of the first quarter 2007, most of whom are based in Russia and Kazakhstan. Customers include leading oil and gas producers such as Gazprom, KazMunaiGaz, LUKOIL, Rosneft, and TNK-BP. C.A.T. oil has been listed in the Prime Standard of the Frankfurt Stock Exchange since May 4, 2006, and has been a member of the SDax since September 18, 2006.