ViaLogy Permian Basin Well Success is Technology Milestone

LONDON, January 21 - -"A-Level" stress test for QuantumRD

- Broad oil patch application seen for technology

ViaLogy PLC (LSE: VIY). announces that, under contract to its client
Fasken Oil and Ranch, Ltd. of Midland, Texas, the first successful well has
been drilled and is in the process of being completed on their Andrews
County prospect. The leading privately-held Exploration and Production
company agreed to collaborate with ViaLogy to use its proprietary
technology, QuantumRD(R), to analyze 3-D and multi-component seismic data,
well logs and geological records to locate well sites in a 10 square mile
Permian Basin acreage block.

Drilling at the ViaLogy-designated location took three weeks and reached
a prescribed total depth of 11,241 feet. Initial well log analysis shows
potential for multiple zones that could be high-graded, highlighted by a net
interval of over 50' feet of significant porosity in the Strawn formation
alone. Strawn limestone porosities are typically very low. For this formation
to be economically viable porosity must reach at least 4%. One of ViaLogy's
key challenges was to locate this porosity and to quantify its aerial extent.
Strawn targets are typically found at depths greater than 9000 feet and with
3% porosities or less are deemed non-productive. The QuantumRD technology
succeeded in locating large continuous zones of 6% plus porosity, a major
achievement. Detailed volumetrics will be computed in the near-term.

All the more significant is the fact that over the last 50 years only
three of 18 attempted Strawn wells in the prospect area showed production. Of
the 15 remaining, seven were completed to produce oil from shallower zones in
the Wolfcamp formations, no porosity having been found in the Strawn. Eight
were declared as dry holes. Additionally, preliminary work shows that the
ViaLogy technology can increase the ability to detect hydrocarbon presence
directly using seismic data to accurately characterize Wolfcamp carbonates.

Participating in the Fasken prospect analysis as an advisor is Dr. Bob
Hardage of the University of Texas' Bureau of Economic Geology (UT BEG),
widely acknowledged as one of America's leading technology centers for
hydrocarbon exploration.

Reviewing the drilling results, Dr. Hardage commented, "The prediction of
a higher porosity zone within the Strawn is impressive and appears to
validate the advantages of the weak signal processing capability underlying
QuantumRD to see subtle changes in the data. Porosity variations in Strawn
stratigraphy are difficult to amplify using conventional geophysical
processing." Despite advances in 3D seismic acquisition and processing, the
exploration industry has faced a major challenge in characterizing porosity
in complex stratigraphic formations known to exhibit fracture and structural
changes below acquisition resolution.

According to the client firm's Chief Geophysicist, "We are impressed by
the accuracy of ViaLogy's predictions, and especially pleased with
QuantumRD's capability to use seismic data to accurately detect porosity
zones within the Strawn formation. This was a very difficult problem.
Significant undeveloped acreage still exists in the Midland Basin. The
introduction of a technology that can characterize porosity in deeper
carbonate intervals could make a substantial difference."

He added, "This well demonstrated to us QuantumRD's potential to
determine drilling locations based on our exploration criteria. We look
forward to working closely with ViaLogy to discover and develop deeper
formations on our acreage including the Strawn, Devonian, and Ellenburger"

ViaLogy CEO Robert Dean said, "We couldn't be more pleased with our
performance. The only real test for an oil-finding technology is: Can it find
oil in the field - not in the laboratory? This is what we are focused on and
we're looking forward to proving our technology in the field. Our core
patented technology, a technique for the injection of noise to enhance the
signal to noise ratios seen in seismic data, allows us to extract more
information from the data - and to identify sub-surface characteristics more
effectively than other techniques. This challenge was to locate oil and gas
in formations that had often eluded other efforts and available techniques.
This has been a great partnership that will allow us to enhance and improve
the ability of E&P companies to produce from Wolfberry, Strawn and deeper
formations."

About ViaLogy: Network Centric Signal Processing

ViaLogy is a leading innovator of network-centric, real-time
signal processing platforms for sensor applications. ViaLogy is currently
deploying and designing computational systems, powered by its patented
technologies, for applications in life sciences, public safety and security,
surveillance, defense and geoseismology. ViaLogy focuses on market driven
problems where automation, timeliness, quality and reliability of information
processing are essential. ViaLogy's core competency incorporates rapidly and
accurately detecting weak signals buried in high noise background and
clutter. This technology can be employed to solve problems involving sensor
integration and information overload challenges involving video, telephony
and control sensors, as well as for enhancement of numerous signal processing
applications. For more information, visit our website at
www.ViaLogy.com.

Except for statements of historical fact, the information presented
herein constitutes forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors
which may cause the actual results.

Robert W Dean, President & CEO - US +1-626-296-6337 (mobile: +1-703-589-3807) ; Terry Bond, Chairman - UK & Europe +44(0)1235-834734 (mobile: +44(0)7860-842756) ; Nominated Advisor to ViaLogy PLC (Seymour Pierce), Mark Percy +44(0)20-7107-8000