Petsec to Begin Drilling on Newly Acquired Lease in Sept. 04

The MMS has awarded Main Pass Block 19 offshore Louisiana in the Gulf of Mexico to Petsec Energy and its joint bidder. The lease is adjacent to and west of the Main Pass 104 lease which Petsec held previously and on which Petsec discovered and produced oil and gas. The lease is approximately 25 miles northeast of the Mississippi delta in approximately 27 feet of water.

The bid of US$1,273,700 million was the highest of four bids at the MMS lease sale held on March 17, 2004. Petsec's share of the bid price was US$955,275. Petsec Energy is the operator and will own a 55% working interest.

Petsec Energy expects to commence drilling at Main Pass 19 in late 2004, following the four wells to be drilled at Vermilion 258 which are targeted to commence in September 2004.