Bounty Oil Plans Seismic Survey Offshore NSW

Bounty Oil & Gas will commence a seismic survey offshore Australia on January 21, 2004, with drilling scheduled for the third quarter of the year. This exploration program, if successful, could meet Sydney's gas consumption needs for the next decade.

The Fugro-Geoteam AS vessel, "Polar Duke", will undertake the 1,500km 2D seismic program up to 50kms off the coast of Newcastle over a period of two weeks.

Bounty Managing Director Tom Fontaine said the results of the survey would be used to select the most prospective drilling location in the company's 8,267 square kilometers PEP-11 permit, for its upcoming "Biggus-1" exploration well.

"Bounty will be the first company ever to drill in the area – we are pioneering energy exploration in this offshore permit," Mr. Fontaine said. The company has recently undertaken research of the area including reprocessing of seismic and aeromagnetic data and satellite analyses of hydrocarbon seeps.

"This research, combined with the fact that onshore Sydney Basin wells have flowed gas and encountered oil shows, indicates the structure we're targeting may hold up to 1.2 trillion cubic feet (Tcf) of recoverable gas," he said.

"A reserve of this size would provide sufficient gas to meet Sydney's entire energy supply, at its current consumption rate, for at least the next 10 years. The work we're preparing to do is of vital importance to the state, its industry and its energy consumers.

"Current energy supply problems in South Australia and New South Wales indicate the vulnerabilities of the industry. If Bounty successfully taps into the anticipated reserves, it will have a tremendous impact in alleviating current and future gas supply shortfalls.

"In addition, any discovery could be commercialized extremely economically because the field is so close to the energy market."

The seismic survey and the drilling is being undertaken with a UK-based partner, Electro Silica Plc which has key projects in Oman and Mongolia.

In the first quarter of 2004, Bounty will also acquire 2,000 kms of 2D seismic in its PEP 38215 permit off the coast of New Zealand's South Island. Drilling is planned for late 2004/early 2005.

This work is also being undertaken with Electra Silica Plc. The joint venture agreement free carries Bounty and its partners through the seismic and gives Electro Silica an option to drill an exploration well.

"The area is highly prospective with probable recoverable gas reserves estimates of 2.2 Tcf. Further, structures with multi-billion barrel oil potential have been identified elsewhere in the permit," Mr. Fontaine said. "We have already received an Expression of Interest in the sale of any gas discovered.

"New Zealand also has experienced considerable problems recently in meeting its energy needs and a local discovery would be a boon to both its economy and its consumers."

Bounty's partners in this project are Electro Silica Plc, Hardman Resources Limited and Albatross Energy.