Beach Makes 5th Find in PEL 91

Drillsearch announced its fifth new oil discovery in the Western Flank Oil Fairway has been made at Basham-1, the final well in a six well exploration drilling campaign in PEL 91. The PEL 91 Joint Venture is Drillsearch 60% and Beach Energy Ltd 40% as operator.

Basham-1 encountered 18 meters of oil shows above an Intra Birkhead interval that included several well developed stacked channel sands. Drillsearch's log interpretation indicates a gross oil column of approximately 15 meters with 4 to 5 meters of net pay. Following wire line logging and formation pressure testing, a drill stem test (DST) was conducted on the well and successfully recovered 16 barrels of fluid consisting of oil, filtrate, formation water and mud over a 2-hour interval. Following completion of the DST, the Basham-1 discovery well was cased and suspended for further evaluation.

Preliminary Volumetric Estimates

The Operator has not yet provided a preliminary volumetric estimate for the Basham Oil Discovery, however based on the pressure data, the drill stem testing results and updated post-drill mapping of the Basham Oil Discovery, Drillsearch's preliminary volumetric assessment suggests oil-in-place of up to 3.5 million barrels (P50 estimate).

Calculation of the preliminary indicative oil-in-place volumetric by Drillsearch has been limited to the area of the Basham Oil Discovery to reservoir sands defined by a high amplitude seismic signature in the immediate vicinity of the Basham-1 discovery well (see map below). The potential recoverable oil volume has not yet been determined and will require additional appraisal drilling and production testing to establish both the commerciality and definitive Reserves for the Basham Oil Discovery.

There appears to be significant additional upside to these initial estimates with an upside exploration Prospective Resource potential of between 0.31 and 15 (Low and High Cases) million barrels oil-in-place. Confirming this upside potential will require significant additional appraisal drilling and production testing.

Basham Oil Discovery – A Structural and Stratigraphic Oil Pool

At the Basham-1 well location, the target intra Birkhead Formation came in 13 meters high to pre-drill prognosis encountering what appears to be a Intra Birkhead channel sand suggesting a stratigraphically trapped oil pool.

Seismic interpretation suggests that the Basham Oil Discovery is a stratigraphic oil accumulation with a structural element to the trapping mechanism. The Basham-1 well intersected Intra Birkhead channel sands in a down-dip location which appear to tie well with the associated seismic amplitude response. This has positive implications for extending the accumulation westwards where the mapped Intra Birkhead horizon appears to occur in a more updip location. The amplitude anomaly extends west of the Basham-1 well location beyond the Arno Oil Discovery, which is located 2.5km north west of the Basham-1 well location.

Upside Implications for Bauer Oil Discovery

Unexpectedly, the Basham-1 well (nearly 4km north east from Bauer-1) intersected all significant geological formations high to pre-drill prognosis. In particular, the Namur Formation was intersected 17 meters higher than expected, a result that has positive structural implications for the northern extension of the Bauer Oil Discovery's Namur reservoir. With the recent Bauer-4 appraisal well also intersecting the Namur high to prediction, preliminary structural interpretations now suggests that a further northern extension to the Bauer Oil Discovery may be indicated. The volumetric potential of this extension may provide further upside Reserve potential to the Bauer Oil Discovery and appraisal options are under consideration to address this interpretation. It may even be possible to include appraisal of the Basham (Birkhead) Oil Discovery when the Bauer (Namur) Oil Discovery northern extension is addressed.

Ongoing remapping of the 3D seismic to account for the Birkhead Formation coming in 13 meters high to pre-drill prognosis is in progress and the Joint Venture is planning to conduct a downhole seismic operation known as "vertical seismic profiling" or "VSP" to help calibrate the 3D seismic in this area of PEL 91 with the aim of improving the accuracy of mapping the discovery. Improving the seismic mapping of the Intra Birkhead horizon and amplitude anomaly will provide additional confidence in channel sand distribution and provide greater confidence in reserve estimates for the Bauer Oil Discovery and the ability to capture the upside potential of the Basham-1 discovery well.