Austral Says New Zealand Drilling Suspended Due to Strike

Drilling operations at all New Zealand exploration drilling sites including Cardiff-2 and Hihi-1A, are presently suspended due to a work stoppage by rig workers; as part of an industry labor negotiation dispute. Management believes that this will be temporary and that drilling operations will resume shortly.

The Cardiff-2 well is presently at a depth of 3228m (10,590 feet) in 12 1/4" hole. Its next casing point is at 4,000m (13,000 feet), at the top of the Kapuni Sands objective; and is expected to be reached within a few days of resuming drilling. The Hihi-1A will now be plugged and abandoned as a dry hole, after being drilled to a depth along hole of 1797m (5896 feet). Although reservoir sands were intersected at the objective level below 1700m, they were not hydrocarbon charged, and there were no zones encountered in the well worthy of flow-testing. After completion of Hihi-1 operations, the rig will move to the Miromiro-1 site to drill that well.

Operations at the Cheal-A production site are continuing normally, with installation of long-term production facilities being near completion. Production testing of Cheal-4, to be followed by Cheal-3 production testing, is expected to commence in the coming week.