August oil production and exploration update

West Siberian Resources Ltd`s oil production during August 2006 amounted to 812,582 barrels (185,890 barrels) or 26,212 barrels per day (6,000 barrels per day). The average daily production increased by 1,874 barrels from the July average of 24,338 barrels per day due to successful production enhancement activities in all regions.

Tomsk region At the Kluchevskoye oil field, well no 204 was drilled and is being completed for production. Drilling of well no 203 has started. To date, six production wells have been completed at the Kluchevskoye oil field, all exceeding expected initial production rates. At the Middle Nyurola oil field, two idle wells will be sidetracked and preparations for this were started. Timano Pechora region At the Middle Kharyaga oil field, production enhancement activities were completed at wells no 1016, no 140A and no 141. At the Liginski block, the first exploration well (Zarechanaya-1) was drilled. The well encountered an excellent quality reservoir in the Lower Devonian section but failed to discover any hydrocarbon accumulations. In the block’s Otradnaya area, with estimated recoverable resources of approximately 55 million barrels, the 2D seismic data is being reprocessed. The next exploration well is scheduled to be drilled in early 2007, with the objective to confirm hydrocarbon accumulations in the Upper Devonian section. Additional 3D seismic surveys are also planned for the Liginski block. Volga Urals region The first exploration well on the Kulturnenskaya prospect has been drilled to a depth of 2,800 meters and resulted in the discovery of the Kulturnenskaya oil field. Initial open hole tests yielded a rate of 3,500 barrels of oil per day from the Bashkirian formation. Drilling continues towards the target depth of 3,200 meters. In the Kovalevskoye area, production tests at the first exploration well confirmed the production rate of 1,000 barrels per day from one formation. The Kovalevskoye discovery is internally estimated to add proven and probable reserves of approximately 4.5 million barrels and was initially tested at 2,100-2,500 barrels per day from two formations. Drilling also continues at the Kochevnenskoye and the Solnechnoye fields. Production at the West Kochevnenskoye field remained shut-in during the month Three Electronic submersible pumps (ESP) have been installed on existing wells at the Novo Kievskoye and Kochevnenskoye oil fields. The objective of the ESP installation program in the region is to support and increase production from developed fields.