Indo-Pacific Energy Ltd. advises that the downhole pressure gauges were retrieved from the Kahili-1B well on December 30. Analysis of these indicates sufficient proven reserves of gas and condensate (light oil) to justify development of the discovery. Flow rates from Kahili-1B may be enhanced in the future by extending the present production zone to include the lower half of the pay sandstones which are not accessed in the original flow test. Gas pipeline tie-in and electricity generation options are presently being assessed to determine the best development strategy for this field. Kahili is expected to be in production by mid year. The Kahili-1B gas field is separated from the oil pool discovered by the earlier Kahili-1 well, and there is good potential for discovery and development of other gas or oil pools in the vicinity of Kahili.