Drilling Commences at Pateke-1 Offshore New Zealand

Australian Worldwide Exploration reports that the Pateke-1 well was spudded on July 19, 2004 using Diamond Offshore's Ocean Bounty.

Pateke-1 is an exploration well located approximately 4 kilometers north of the Amokura oil field. Pateke-1 is targeting oil in the Kapuni "F" sand reservoir, which contains oil at the adjacent Amokura and Tui fields.

Pateke-1 is the third well in AWE's current exploration program offshore Taranaki Basin, New Zealand.

Following completion of operations at Pateke, the joint venture plans to drill the Kiwi-1 well, located approximately 4 kilometers south west of the Amokura oil field. On a "trouble free" basis, the well is expected to take approximately 16 days to reach its planned total depth of approximately 3,927 meters.

Participants in PEP 38460 are:

AWE New Zealand Pty Ltd ("AWE") 20.0%
New Zealand Overseas Petroleum Limited (operator) ("NZOP") 45.0%
Mitsui E&P New Zealand Limited ("Mitsui") 12.5%
Stewart Petroleum Company Limited ("NZOG") 12.5%
WM Petroleum Limited ("Pan Pacific") 10.0%