Austral Pacific Issues Cheal Update



Austral Pacific Energy Ltd. said that the initial 10-day production testing of the Cheal B3 well was completed on 5 February 2007.

The company had disclosed the initial flow rates for the well in late January. During that time the well produced at an average rate of 434 barrels of oil per day and 283 thousand standard cubic feet of gas per day. The well was choked back throughout the test to maintain a flow rate of approximately 500 barrels of oil per day. At press time, Austral Pacific expected further testing of the Cheal B3 well to commence on Friday.

Testing of the Cheal B1 well commenced on 7 February 2007 and was jet pumped for 11 days. The well produced at an average of rate of 126 barrels of oil per day and 262 thousand standard cubic feet of gas per day and 7 barrels of water per day. The well has been shut in for a build up test.

Testing of the Cheal B2 well commenced on 19 February 2007 and was jet pumped for 14 days. The well produced at an average rate of 159 barrels of oil per day and 96 thousand cubic feet of gas per day and 1 barrel of water per day.

Workovers of the Cheal A3 and Cheal A4 wells and a re-entry and completion of the Cheal A2 well as a possible water injector are expected to commence in mid April. The tubing in the Cheal A3 and Cheal A4 wells will be replaced with chrome and the jet pump will be set closer to the Mt Messenger formation in order to improve the efficiency of the jet pumping operations.

The Cheal A5 and Cheal A6 wells will be drilled from the Cheal A site once construction of the production facilities has been completed. The wells are expected to spud in mid June and will be tied into the new facilities as soon as they are completed.

Construction of the Cheal production facilities continues at the Cheal A site with work progressing well. The main pipe racks and the electrical control house have now been installed along with one of the main coolers. Detailed engineering design on the pipelines connecting the Cheal A and Cheal B sites is nearing completion and the pipeline construction contract has been let. The gas sales agreement is nearly complete while negotiations to secure arrangements for the long term transportation, storage and sale of crude oil production are continuing.

Rick Webber, President and CEO of Austral Pacific said, "We are pleased with the results of the well testing, particularly so in regard to the B3 well. The better weather we are now experiencing has led to an acceleration of progress on the construction of the production facilities and we expect the plant to be commissioned in May with full production of 1900 barrels per day of oil available in July."

Austral Pacific holds a 69.5% interest in the permit and is the operator.

Petroleum Exploration Permit (PEP) 38524 – New Zealand

On 8 March 2007, Austral Pacific was awarded PEP 38524 in the southern offshore Taranaki Basin. PEP 38524 is located immediately west and north of D'Urville Island and covers an area of 2,187 square kilometers. The first stage of the work program requires Austral Pacific to undertake seismic reprocessing, acquire aeromagnetic data and complete either a 2D or 3D seismic survey by 1 April 2008.

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