Santos Completes Reserves Review of Casino Field

Australian Worldwide Exploration Limited reports that the Vic/P44 Operator has completed its reserve review of the Casino gas field offshore Australia.

The results of these studies have increased the gross proved and probable (2P) sales gas reserves to 285 Petajoules ("PJ"). The increase in reserves has arisen following the completion of reservoir studies, which included a re-interpretation of the 3D seismic and integrated log, core and production test data obtained from the Casino-3 appraisal well.

The Front End Engineering and Design ("FEED") studies for the field are now well advanced, as is AWE's progress in arranging project financing for the development. The critical regulatory approvals are scheduled for completion by the end of 2004.

The development schedule is still on target to meet first gas sales in Q1, 2006.

Commenting on the reserve increase, AWE's managing director Mr Bruce Phillips said:

"Prior to the Casino-3 appraisal well, the field's 2P reserves were estimated by the joint venture to be in the order of 140 PJ (gross), so increasing that reserve by over 100% is an outstanding result for our shareholders."

"We look forward to working with our co-venturers to complete the development of the field in the shortest possible time frame."

Participants in VIC/P 44 are Santos as operator with 50%: AWE with 25% and Mittwell Energy with 25%.

The Casino gas field

The Casino gas field was discovered in September 2002, after the Casino-1 well encountered a 47-meter gas column in the Waarre sandstone. The Casino-1 well was drilled after interpretation of a high quality 3D seismic survey that covers approximately 538 square kilometers across the eastern portion of the exploration permit.

Following success at Casino-1, the joint venture immediately drilled the Casino-2 well, which also encountered a gas filled reservoir in the Waarre Sandstone. Analysis of the second well indicated that the second well intersected a younger reservoir, which was potentially not in pressure communication with the discovery well.

Initial reserve calculations over the Casino field indicated that recoverable gas reserves were of the order of 140 PJ. This was not of sufficient size to justify an economic development of the field.

Later analysis of the seismic and well results indicated that the Casino field might extend further downdip in the younger sand, consistent with the seismic amplitude anomalies and the differential pressure data from the initial 2 wells.

The Casino-3 well was proposed and drilled in the second half of 2003, proving that the gas column in the younger sand extended for in excess of 290 meters. Importantly, the reservoir quality remained high and the pressure data indicated that both wells in the younger sand were in apparent pressure communication. The well flowed gas at a rate of 45 million cubic feet of gas per day.

Following a comprehensive technical review of the field, the joint venture has increased the estimate of proved and probable sales gas reserves to 285 PJ (280 Bcf). This figure is subject to final certification and audit.