Drillsearch Energy Reports Higher 2P Reserves

Drillsearch Energy Limited reported a significant increase of 157 percent in the Company’s 2P (proven and probable) Reserves to 28.5 million barrels of oil equivalent (MMboe) and a 41 percent increase in its 2C Contingent Resources to 14.8 MMboe as at the end of the 2013 Financial Year (FY). The uplift in Reserves and Contingent Resources follows the completion of the Company’s latest annual independent Reserves and Contingent Resources review by RISC and DeGolyer and MacNaughton.

The table below sets out the Company’s Reserves and Contingent Resources position as June 30.

Business Segment Reserves (MMboe)

• Western Flank Oil : 5.05 (1P), 7.58 (2P), 11.30 (3P)
• Western Cooper Wet Gas - Middleton Gas Project : 6.10 (1P), 15.87 (2P), 27.69 (3P)
• Western Cooper Wet Gas - PEL 106A Gas Project : 1.48 (1P), 4.46 (2P), 12.43 (3P)
• Northern Cooper Wet Gas : 0.03 (1P), 0.05 (2P), 0.05 (3P)
• Eastern Cooper Oil : 0.09 (1P), 0.50 (2P), 1.26 (3P)
• Total Reserves : 12.76 (1P), 28.46 (2P), 52.72 (3P)

Business Segment Contingent Reserves (MMboe)

• Western Flank Oil : 0.17 (1P), 0.39 (2P), 0.64 (3P)
• Western Cooper Wet Gas - Middleton Gas Project : 0.44 (1P), 3.29 (2P), 9.95 (3P)
• Western Cooper Wet Gas - PEL 106A Gas Project : 0.00 (1P), 0.00 (2P), 0.00 (3P)
• Northern Cooper Wet Gas : 4.68 (1P), 10.41 (2P), 25.24 (3P)
• Eastern Cooper Oil : 0.01 (1P), 0.69 (2P), 1.86 (3P)
• Total Contingent Reserves : 5.30 (1P), 14.78 (2P), 37.69 (3P)

Reserves and Contingent Resources in the above table for the Western Cooper Wet Gas Project – PEL 106A Gas Project Area have been adjusted by Drillsearch to show Reserves and Contingent Resources with a 40 percent interest to reflect the impending Joint Venture farmin by Santos Limited. As announced July 4 Drillsearch ownership in PEL 106A and PEL 513 will reduce to 40 percent and operatorship pass to Santos Limited upon completion. This transaction is expected to complete in September 2013.

The increases in Reserves and Contingent Resources since July 1 were driven by four factors:

• The continuing success in exploration, appraisal and development in the Western Flank Oil Fairway delivering four new oil discoveries out of five exploration wells and the ongoing successful appraisal and development of the Bauer Oil Field which not only replaced Reserves from all oil production during FY 2013 but delivered additional Reserve replacement
• An increase Estimated Ultimate Recovery (EUR) of producing wells in the Western Cooper Wet Gas – Middleton Gas Project
• The conversion of the Western Cooper Wet Gas PEL 106A Project Area Contingent Resources for the existing discoveries to Reserves through Drillsearch securing additional development and commercialization arrangements with Santos Limited, as announced July 4
• The booking of Contingent Resources in the recently acquired Acer Energy permits PRLs 14, 17 and 18 along with the wet gas discoveries in PEL 101, both in Drillsearch’s Northern Wet Gas project area

Drillsearch Managing Director Brad Lingo said, “We are very pleased with the ongoing growth in the Company’s Reserves and Resources, which demonstrates Drillsearch’s ability to deliver on our focused strategy. The success of exploration, development and production across our Cooper Basin acreage has established a strong platform of Reserves and Resources upon which we can continue to grow the Company into a significant Cooper Basin-focused oil and gas producer.”