Production Testing Recommences at Salinas Basin

Victoria Petroleum has been advised by the Operator Trio Petroleum that production testing and stimulation operations have recommenced on the San Antonio-1 well in Salinas Basin, California, with the work over rig currently on site.

The planned operation over the next fourteen days is to carry out testing and acidization over the Monterey Chert zone, which encountered numerous significant oil and gas shows within the Monterey Chert over a 55 meter interval from 1555-1610 meters, during the drilling of San Antonio-1.

The aim of the testing and acidization operation is to establish commercial oil production from the Monterey Chert zone in the San Antonio-1 well.

Within the San Antonio anticlinal feature, a small portion which is being tested by the San Antonio-1 well, the oil bearing Monterey Chert interval is interpreted to have the potential to contain up to 46 million barrels of recoverable oil, depending on the result of the current testing and stimulation program.

The initial recovery of 300 barrels of oil and further current recovery of 80 barrels of clean oil 39o API oil from lower oil bearing zones in the well is considered encouraging for further flows of oil from stimulation and testing operations at the San Antonio well site. Further encouragement is provided by the oil shows and oil flows of up to 500 barrels of 38 degree API oil per day cutting 20% water observed in a down dip 1983 well drilled on the flanks of the San Antonio anticline five kilometers to the northwest of the San Antonio-1 location.

Additional encouragement for the presence of oil in the San Antonio Prospect area is provided by adjacent production of 500 million barrels of oil from the prolific San Ardo Oil Field, 12 kilometers to the north.

The San Antonio Oil Project area covers a 3,940 acre leased 'Area of Mutual Interest' located in Monterey County, California.

Victoria Petroleum NL has a 9.77%* working interest in the San Antonio-1 well through its wholly-owned subsidiary Victoria Petroleum, Inc.

* After the recovery of drilling and completion costs from production from San Antonio-1, Victoria Petroleum's contributing interests and share of production in ongoing development and production will be 7.3275% in the San Antonio-1 well spacing unit and 5.53875% in the remaining San Antonio leasehold.

Any hydrocarbons produced from the San Antonio-1 well and prospect are commercially very attractive as an oil and gas pipeline runs within 400 meters of the San Antonio-1 well site.