Avery Resources Enters Exploration Agreement in Australia's Cooper Basin

Avery Resources has exercised its option to enter into an agreement with Australian company Innamincka Petroleum Limited and US company Vernon E. Faulconer Australia Inc. to earn interest in three separate sub-blocks (more than 36,000 acres) within highly prospective Petroleum Exploration License PEL 103 in the South Australian sector of the Cooper Basin.

PEL 103 was a highly sought-after license that was announced as a part of compulsory relinquishments of leases that were long held by a Santos-led consortium. Santos is a major Australian oil and gas company known for its development of the Cooper Basin, Australia's largest onshore resources project. Since Innamincka Petroleum began operatorship of PEL 103, six exploration wells have been drilled in the license, resulting in the Flax and Juniper oil discoveries and the Yarrow gas discovery. Flax and Juniper are currently being evaluated for commerciality. The three Avery blocks are located adjacent to the southeast, northeast and east of the Flax and Juniper oil pools:

Aspen Block

By contributing to the cost of the Aspen-1 well, Avery will earn a 25% interest in the Aspen Block, a 55 square kilometre area (approximately 13,590 acres) in the southeastern part of PEL 103 that covers a large part of the central part of the regional Innamincka High feature. The Cummin-1 well, drilled toward the eastern end of the high feature, had strong oil shows in numerous sands.

South Candra Block

By contributing to the cost of two wells, Avery will earn a 25% interest in the South Candra Block, a 46 square kilometre area (approximately 11,370 acres) in the northeastern part of PEL 103 that includes the southern part of the Candra Dome feature and its southern flank. The Candra Dome hosts the Acrasia and Reg Sprigg oil fields, both within 5 kilometres of the South Candra Block boundary.

Turban Block

By contributing to the cost of a 3D seismic survey, Avery will earn a 35% interest in the Turban Block, a 46 square kilometre area (approximately 11,370 acres) in the eastern part of PEL 103 that covers a large part of the northwestern flank of the regional Innamincka High feature, updip from the Juniper oil pool.

The three areas will initially give Avery an interest in three near-term oil exploration wells, with drilling planned for fourth the quarter of 2005, plus a 3D seismic survey in 2006 aimed at identifying drilling targets in an under-explored area that updip from a large oil accumulation. All three areas are considered to have exploration follow-up potential in a variety of plays and represent an active expansion of Avery's interests in Australia's most prolific onshore petroleum province.

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