Real Energy Inks Deal for Rig 916 to Drill at Cooper Basin's Permit ATP927P

Real Energy Corporation Limited, a Cooper Basin-focused oil & gas exploration company, reported Monday that it has signed a contract with Ensign International to commence drilling at its 100 percent-owned ATP927P exploration permit in Cooper Basin, Queensland, Australia in early September.

A contract has been signed for Rig 916 with one firm well and an option for two additional wells. Drilling of the Tamarama-1 well is expected to commence in early September with two additional wells in the region, Avalon-1 and the West Flynnes-1, scheduled for drilling subject to the results of Tamarama-1. ATP 927P is surrounded by proven and producing gas and oil fields operated by Santos, and gas production is being used to feed growing demand for east coast gas.

The Tamarama-1 well is Real’s maiden exploration well in the Cooper Basin, aimed at confirming the presence of gas in the Toolachee and Patchawarra formations and determining reservoir producibility. A secondary objective of this well is to obtain samples from the Toolebuc Shale to further our knowledge of this potential shale oil play. The well is expected to take approximately two and a half weeks to drill and complete from spud date.

Results from the initial drilling program will underpin Real’s forward work plan, with successful wells to be cased and suspended for flow testing in early 2015. Real Energy's acreage is prospective for basin centered gas (BCG), conventional oil and shale oil and gas. This upcoming drilling program will test the presence of BCG within ATP927P. An Independent Geologist’s report prepared for Real Energy estimated that the Permian section in ATP927P and ATP917P contains approximately 10.2 trillion cubic feet (Tcf) of BCG.

The program has been structured so that if Tamarama-1 disproves the existence of BCG, the program can be paused. Any success or failure in this drill program does not have implications for the presence of other forms of hydrocarbons, and management looks forward to testing the other prospective conventional oil and shale oil and gas plays within Real's acreage in future drilling programs.

Real’s Managing Director, Scott Brown said: “As one of the few independent companies with substantial 100 percent-owned acreage in the Cooper Basin, we are ideally placed to take advantage of the significant unlocked value that prospects in the Basin hold.”

“This drilling program will focus on the basin centred gas play, which we expect is present over the whole area of ATP927P permit at depth from approximately 7,217 to over 9,842 feet (2,200 meters to over 3,000 meters). This drilling program follows on from an extensive analysis by the company of seismic data and wireline logs from previously drilled petroleum exploration wells in the area.”

“The commencement of drilling is an important milestone for Real and follows significant planning and investment to reach this stage. We are pleased to be moving to the next phase of exploration and development of this significant asset which is situated in a proven hydrocarbon province.”

“Real will advise shareholders when the rig is on site.”