Mosaic Begins Second Half of Drilling Program

Mosaic Oil is to begin the second half of its drilling program in Australia in mid-August following its successful $14 million fund raising last month.

The Century 7 rig has been contracted for two firm and two optional wells and the company is planning to use ODE Rig 5 for Waggamba #3 and other work.

The first well - Mamaree #2 - will be drilled four kms to the south west of Mosaic's successful Waggamba #2 well. The Permian target zones will be drilled with nitrogen to avoid mud damage.

Mamaree #1 was drilled by Union Oil in the 1970's and there is considerable evidence the Permian gas target zones were damaged by drilling muds.

The second well in the series using Century No 7 rig will be Rockhampton High #1 - a test well to investigate formations east of the Tinker area in ATP709P.

At the beginning of October, Waggamba #3 will be drilled using ODE Rig 5.

The company is planning a six months drilling campaign in its south east Queensland leases to test new areas and increase reserves for future sales, especially those under the CS Energy gas contract signed in June 2004.