Great Artesian Oil & Gas Acquires Stake in Otway Basin

Great Artesian Oil & Gas has entered into a farm-in agreement with Oilex whereby by Oilex will earn a 60% participating interest in EPP 27 by fully funding the cost of an exploration well within the permit, with an option to drill a second well in order to increase its interest to 75%. The farmin is conditional upon Oilex obtaining funding for the first well by November 15, 2004. Currently, Great Artesian retains a 100% interest in EPP 27.

This farmin is set against increasing industry focus on the offshore Otway Basin following the recent go-ahead for the development fo the Woodside Energy - Origin Energy led consortium's Thyalcine and Geographe gas field in the Victorian portion of the Otway Basin and the forthcoming drilling of the Amrit Prospect in Vic/P52 by Santos later this year.

EPP 27 is considered a very prospective area within the offshore South Australian Otway Basin. It contains more than 15 identified prospects and leads, most involving multiple potential reservoir targets, a number of which are associated with active hydrocarbon seeps and/or seismically defined direct hydrocarbon indicators. A Final location for the first well will be selected once seismic processing has been completed on a number of prospects near the Breaksea Reef and Galatea structures. Only two wells have been drilled in this permit, Argonaut in 1968 and Breasea Reef-1 in 1984. The latter well has an interpreted oil zone within a sandstone of the Belfast Mudstone formation and prospect in this area are encompassed by a large, naturally occurring hydrocarbon seafloor seep.