Aladdin Oil & Gas Company ASA has several projects going on Ukhta and in Orenburg, and we find it important to inform about our progress in these projects.

New Gas on WU:
GT has drilled 2 wells in the area around structure 17 where GT discovered oil in the wells 17A & 17B. The recently drilled wells 17C & 17D both discovered natural gas. The wells are lying 300-400 meters from each other. It is too early to say anything about the size of the gas accumulation, whether this is a gas cap above the oil or smaller pockets of gas. Further evaluation and testing will show if the gas is commercial or may be used as gas lift in the oil production. A pipeline going from Ukhta to the Yarega field is close to the structure 17. No reserves have been credited to the structure 17 area as of today.

Veselovskoye license:
Recent G&G and engineering studies of the license show the potential of this block lying in the southern part of the Orenburg area. The block is partly covered by 2D seismic and 3D seismic (340sq.km). So far based on this seismic 16 leads have been identified. Prelminary resource estimates for these leads are more than 100 mill prospective resources. In addition 5 discovery wells have tested oil on 5 different structures confirmed by both test and seismic. The preliminary 2P reserves figure is between 7-9 mill boe. A full reserves report for this license is in progress. TNK BP is producing from the same horizons in a neighboring field lying next to the license.

Status Well 83 – Nikiverovskoye license, Orenburg
The well has been fracced by Schlumberger. The operation was carried out according to plan. Due to very cold and difficult weather conditions and problems with a pump the reactivation of the well has taken longer time than planned. So far we have confirmed that we have active oil in the system and that an estimated flow rate will be 3-4 times initial rate – 75-80 bopd of liquid. We do not know at this stage the content of oil in the liquid. Results are expected within a week if the weather conditions don’t halt the operations.

Restructuring of debt:
AOGC has entered into a dialogue with its bondholders regarding restructuring of the entire debt profile by extending maturity dates and reducing the coupon interest rates in order to give the Company more ability to execute its business plan, ease our refinancing strains, amend our interest service obligations and to be able to attract additional equity.

The maturity dates are suggested to be extended ranging from six months to two years and the coupon rates reduced by about five percentage points over a specified period of time. This will, if approved by the bondholders, significantly reduce our short-term debt service obligations.

The bondholders will be compensated by way of shares issued at the same rate as the shares issued in the direct placement to be decided upon by an extraordinary shareholders meeting to be held 18 February 2010. The proposal is contingent upon minimum NOK 20 million in new equity being raised in said placement.

Cumulative debt service payment will be reduced by approximately NOK 100 million by 2 May 2011, and by approximately 65 million by 2 May 2012, were the proposals set forth to be approved.

Aladdin Oil & Gas Company ASA is a Norwegian based exploration and production company, head quartered in Oslo, with its shares traded on the OTC list under the ticker code AOGC. The company owns the Russian oil company OOO Geotechnologia which holds two licenses in the Timan-Pechora province in Northwest Russia, as well as 6 licenses through our companies ZAO Orneftegaz and OOO Veselovskoye in the Orenburg area.