Drillsearch Commences Drilling Program at ATP 940P in Cooper Basin

Drillsearch Energy Limited announced that Anakin-1, the first well in the Drillsearch-operated ATP 940P Joint Venture, was spud Thursday, Sept. 19 at 1am local time. This marks the start of an initial four-well shale gas and tight sands drilling program in Joint Venture with QGC, a BG Group business. ATP 940P is located in the Central Cooper Basin Nappamerri Trough Shale Gas Fairway in Southwest Queensland, Australia. Drillsearch as Operator holds a 40 percent interest with QGC holding 60 percent.

The four well program - Anakin-1, Charal-1, Padme-1 and Amidala-1 - will be drilled over the next year and will test the potential for gas production from unconventional shale and tight gas zones in the Nappamerri Trough in the Central Cooper Basin.

The primary targets of the drilling program are the shales of the Permian Roseneath and Murteree Formations and the sandstones of the Permian Patchawarra Formation. The secondary targets are the Sandstones of the Permian Daralingie, Toolachee and Epsilon Formations and Tirrawarra Sandstone. The drilling program will also test the “basin-centred gas” pay interval reported by Beach Energy to be present in this part of the Nappamerri Trough of the Cooper Basin.

The drilling locations for the first three exploration wells have been selected based on initial interpretation of the recently acquired 406.1 square miles (1,052 square kilometers) Winnie 3D seismic survey. The drilling location for the fourth well will be finalized based on the drilling results from the initial wells. Anakin-1 is located 1.86 miles (3 kilometers) east of the Queensland and South Australia border and is located approximately 4.97 miles (8 kilometers) south east of Beach Energy’s Encounter-1 well in PEL 218 and 7.14 miles (11.5 kilometers) south of Halifax-1 well in ATP 855P. Halifax-1 is on extended production test and has been assessed by a third party reserves auditor as discovering a 2C Resource of ~ 0.6 trillion cubic feet (Tcf).

Drillsearch will first complete three top-holes in Anakin, Padme and Charal to ~8,202.1 feet (~2,500 meters) and run 9.625 inch casing before upgrading the Weatherford 826 rig with specialist High Pressure, High Temperature (HPHT) equipment to provide for safe and effective drilling through the high temperature reservoir formations. After upgrading equipment the Weatherford 826 rig will be the most fit for purpose HPHT drilling unit in Australia. The three top-holes will be completed by end 2013 and commencing in January 2014 all four wells will be drilled to total depth of ~13,123.3 feet (~4,000 meters). Reservoir intersections are expected in the first well, Charal-1 during the March quarter 2014.

Extensive coring and formation evaluation is planned for each of the wells with the aim of better defining gas presence as well as assessing the mechanical properties and likely deliverability of the formations. It is planned to case and suspend all four wells immediately. The completion of this drilling program is anticipated by the end of the third quarter of Financial Year 2014.

Following completion of the drilling of the target intervals, the drilling program will proceed with an extensive fracture stimulation and extended production testing program targeting the REM shale sequence and Patchawarra tight gas sandstones. The fracture stimulation and production testing is expected to commence from mid 2014.