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16 dec 05 see the company news release

Important Update on the Oil and Gas exploration activity of IB Daiwa’s US based subsidiary, Lodore Resources


Kami

As announced by Lodore Resources on 16th November, the Pel-Tex Miami #E-1 well ("Kami") had to be sidetracked due to strong gas flows in the original hole at a depth of 13,297 ft.

Very positive gas shows have again been encountered in the sidetrack hole, and it has been decided to run protective casing at this depth to secure the hole down to 12,995 ft. Electric logs were run prior to the casing, with the interpretation showing two reservoir intervals containing gas, the thicker of which was over the interval 11,876 – 11,894 ft. Whilst these shallower sandstone reservoirs were not the main target of the well, management believe, on the evidence to hand, that they may contain producible gas. The addition of the protective casing will ensure that access to this shallow reservoir, and the commercial benefit of this secondary gas find will be preserved while the main target is pursued.

After setting protective casing the Kami well will continue to be drilled on to the deeper and primary reservoir target, which is believed to have been entered by the original hole and to have been the cause of the gas kick . It is expected to take approximately two-three weeks to drill to and through this target to a final depth of approximately 14,000 ft. Given the high pressures and free gas that were encountered in the original hole, the sidetrack well is being engineered to enable the deeper section to be drilled to completion and to allow appropriate production tests to then take place as soon as possible.

A further announcement on Kami will be made when the well has reached its final depth and the deeper, main reservoir section has also been logged, and a decision made as to which reservoir can be tested and hopefully developed to the production stage.

Dr Williams, the Chief Executive of Lodore Resources, commented "The evidence of gas at the shallower levels is extremely positive news for IB Daiwa. We will continue to complete the drilling before deciding which reservoir/s will take priority. It is still too early to comment upon the commercial implications, but with gas prices at historically high levels, Kami looks like it may be a very important and valuable asset for the company"