Drillsearch, Santos Seal JV for Western Cooper Wet Gas Commercialization

Drillsearch Energy Limited (Company) announced Tuesday the satisfaction of the mutual due diligence conditions to the series of binding transactions with Santos Limited (Santos) as announced July 4. The transactions aim to accelerate Western Cooper Wet Gas commercialization and expand Drillsearch’s Cooper Basin oil Reserves and production in Australia.

Drillsearch believes the transactions with Santos deliver a material result for the Company. The transactions offer an attractive outcome for the shareholders of both companies and builds on the productive relationship that Drillsearch has developed with Santos over the past several years.

Key features of the series of transactions include the following:

• Santos has acquired 60 percent interest in Western Cooper Wet Gas Project, namely permits PEL 106A and PEL 513
• Santos has committed to fund work program valued by Drillsearch at $93-111.69 million (AUD 100-120 million) to accelerate wet gas commercialization
• Drillsearch has secured a firm Gas Sales Agreement for Western Cooper Wet Gas production with both fixed and oil-linked gas pricing
• Drillsearch has secured additional Cooper Basin oil Reserves and production by increasing its interest in Tintaburra Block to 40 percent (from 11 percent)
• Santos has purchased Drillsearch's 25.8 percent interest in PEL 100 and is farming in to a 33 percent interest in Inland-Cook Oil Fairway ATP 549P West