Austral Pacific Announces Oil & Gas 2004 Drilling Schedule

Austral Pacific Energy Ltd. (formerly Indo-Pacific Energy Ltd.) announces the updated schedule for its 2004 onshore Taranaki, New Zealand drilling program, following the award of three new Petroleum Exploration Permits in the region. The drilling program covers several Austral operated and non-operated permits.

The first well is Cheal-A3X well in PEP 38738 (Austral 33.5%, operator), scheduled to spud in late March. This well will be deviated 500m north from the existing Cheal discovery site to intersect the Mt Messenger sandstones, some 200m (600 feet) below the Urenui, where some oil pay was indicated by electric logs in Cheal-1, and good reservoir but without oil charge was intersected in Cheal-2. The Cheal-A3X intersection, being higher on the structure, may well have both better reservoir and oil charge in the Mt Messenger sands than other Cheal wells.

The well will also intersect the Urenui Formation oil/gas pay sands intersected and tested in Cheal-1 & Cheal-2 near 1400m (4500 feet) depth. The Cheal-A3X well will target these pay sands higher on the Cheal structure than the previous producer wells, and at a location where better reservoir may be encountered.

The second well in this program, Honeysuckle-1, in PEP 38741 (Austral 30%, operator) will follow Cheal-A3X, and is to be drilled to 1700m (5,500 feet) to test several Mt Messenger sand targets mapped from the 2003 Austral operated Kaimata 3D seismic survey. Honeysuckle is one of several targets identified by the Kaimata survey within PEP 38741; other significant targets are Jasmine, Wisteria, Supplejack and Ratanui. These are similar targets considered by management to be prospective for oil and/or gas. The Honeysuckle trap is situated near the south-west end of the deeper McKee oil field, and in the event of discovery might establish reserves of similar size to the nearby Ngatoro oil field.

The third and fourth wells are located in Permits PEP 38765 (Austral 27.5%) and PEP 38748 (Austral 25%), situated adjacent and south of PEP 38741. These permits were also covered by the Kaimata 3D survey; and a number of similar targets have been identified in these areas. The joint venture parties are presently finalising their choice for a well location in each of these permits, which are to be drilled after Honeysuckle.

The Oru structure in PEP 38716 (Austral 43%, operator), a similar Mt Messenger target situated above the eastern flank of the Waihapa oil field, is also being assessed as a possible fifth well for drilling during this program.

Austral Pacific CEO Dr Dave Bennett said: "This drilling program provides several excellent opportunities for new oil and/or gas discoveries, in an area surrounded by producing fields. It will also determine the appropriate manner in which to develop the Cheal field itself. Obviously, any discoveries will themselves stimulate further drilling within our permit areas."

In addition to the above shallow wells, Austral and its partners have been making plans for deep gas drilling. The first deep gas target is planned as the Cardiff-2 well in PEP 38738 (Austral 33.5%, operator) which will re-evaluate the gas discovery made by Shell some 14 years ago at Cardiff-1. Through the application of more modern drilling technology and using modern techniques to hydraulically fracture gas pay intervals, it is very possible that Cardiff-2 could prove-up a very substantial gas-condensate reserve.

The Cardiff structure is mapped as a large anticlinal trap within the Kapuni Sands below 13,000 feet depth, some 12 km (7 miles) long by 3 km (2 miles) wide, situated immediately adjacent to the giant Kapuni gas-condensate field, which has been in production for the past 35 years, and has now produced in excess of 800 BCF of gas and 65 million barrels of condensate. The parties have now agreed to re-establish the Cardiff well-site, purchase inventory and tender out drilling and other services, in preparation for a mid year start to drilling of Cardiff-2. The parties are in discussions with a funding partner to assist with this well.

CEO Dave Bennett commented: "The now critical gas supply situation in New Zealand, ensures that new gas reserves will find a ready market at a strong price. In addition to Cardiff, we also have the comparable Waitoriki Prospect in PEP 38741 mapped on 3D seismic and ready to drill; while several other significant deep gas targets have been identified within our permit areas."