Ausam Energy Suspends Bellbird West-1

The Bellbird West-1 well has reached a depth of 2,359 meters through conventional drilling. The well has been suspended by setting 5.5 inch casing to bottom in preparation for underbalanced drilling of the deeper primary objective, the Permian Bandanna and Upper and Lower Tinowon sandstones. Underbalanced drilling of these primary objectives to a total depth of 2,540 meters is scheduled to begin during October 2006 when the equipment and personnel return from contract in New Zealand.

To date conventional drilling has penetrated only the shallower secondary objectives of the Evergreen formation, the Precipice Sandstone, the Showgrounds Sandstone, and the Rewan Group. A DST was conducted over the Showgrounds Sandstone (2,246 to 2,272 meters), which when drilled had sufficient indications of potential reservoir and the presence of hydrocarbons to merit a test. Preliminary results indicate that the Showgrounds is not commercial at this location. A suite of wireline logs was run across the secondary objectives and is currently being evaluated.

Bellbird West-1 commenced drilling July 22, 2006 using the ADS Rig-6 and under a farmin agreement with Rawson Resources Limited in ATP 552P in the Surat/Bowen Basin, Queensland. ATP 552P is a 42,600 acre (67 sections) permit along trend with the Fairymount and Alton oil fields. Under the farmin agreement, upon completion of underbalanced drilling, ownership in permit ATP 552P will be GAOG 50% (the beneficial owner of ATP 552P), Rawson 25%, and Ausam 25%. In addition to Bellbird West-1, there are three other potential drilling locations in two separate structures in ATP 552P.

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