Whicher Range-5 Multi-zone Fracture Stimulation to Proceed

The Board of Amity Oil Limited has approved Amity's participation in a massive multi-zone hydraulic fracture stimulation program on the Whicher Range-5 well. The operation is scheduled to commence on or about July 15 2004. Fracturing equipment has been committed to and is now being mobilized from New Zealand. Other specialty material has been ordered and is being delivered from the United States.

Whicher Range-5 was suspended as a potential gas producer in January 2004. The planned fracturing program will be conducted over five sandstone sequences starting from the bottom zone and progressing individually to the uppermost zone. Due to the induced fractures propagating not only outwards from the well bore but vertically as well, almost all the potential gas zones (approximately 75%) intersected in the well will be affected to some degree and have their permeability enhanced.

Due to the previous recognized damage that water has caused, the fluid used for fracturing will be diesel fuel based. Whilst this adds considerable cost to the operation, it is unlikely to react with the formation and inhibit the gas flow. Diesel fuel will be pumped into the formations at very high pressures until the fractures are initiated and pumping will continue until the fractures propagate to about 100 meters from the well bore.

Each zone will take about five days to frac and cleanup, and a final flow from all the zones together will be conducted for at least 20 days after the frac operation is complete. A very hard and coarse grained proppant will be pumped into each fracture during the operation to hold the fractures open after the pressure is released. This methodology is being used successfully overseas to induce commercial production from low permeable reservoirs.

The Whicher Range Gas Field is located onshore, approximately 200 kilometers south of the city of Perth, Western Australia and 22 kilometers south of the town of Busselton in Petroleum Exploration Permit EP 408.

The favorable location of the field, about 35 kilometers southwest of the southern end of the main gas pipeline from the North-West Shelf, means it can compete on price and transport tariff with gas from the North-West-Shelf. A gas supply from Whicher Range would be strategically advantageous for Perth and the Southwest, by reducing dependence on the long single pipeline from the Northwest Shelf.

Several companies have shown interest in taking gas from the Whicher Range field provided Amity can demonstrate a viable flow rate. One of these entities has recently put a serious commercial proposition to Amity regarding gas supply to a nearby power generation plant.

Participants in the Whicher Range are Amity 47.957% as operator; Korea National Oil Corporation with 20.000%; Seoul City Gas Company Limited with 15.000%; GeoPetro Resources Company with 17.043%.

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