Matrix Successful at Langsa Field

Matrix Oil announced completion of development operations at the L Field in its Langsa Technical Assistance Contract area in the offshore North Sumatra Basin of Indonesia with a cumulative flow of almost 8000 barrels of oil per day from two successfully completed re-entry wells.

Following the flow of 4200 barrels of oil per day from its L1 well announced earlier, the L2 re-entry well was completed after testing at a stabilized rate of 3637 barrels of oil per on a 1”choke. Oil gravity was 45.4ºAPI and the gas rate was 1.3 million cubic feet per day. The flowing tubing head pressure was 367 pounds per square inch. The flow came from a 150ft reservoir section at a depth of almost 5700 feet.

The completion of the development program on the field secures the company's future as one of Australia's most significant oil producers.

Matrix will move into production from the two wells later this month. The MV8 "Langsa Venture" FPSO is now being anchored on site ahead of first production. The FPSO is capable of storing 230,000 barrels of oil, equivalent to approximately three weeks' production from the Langsa fields, in which Matrix has a 90% interest, and has proven and probable reserves of 33 million barrels.

"We are literally only a couple of weeks away from becoming Australia's sixth largest petroleum producer," said Mr Brian Hockney, Managing Director of Matrix Oil, adding that "the success of the second re-entry well guarantees the robust economics of this project and sets us up as a company"

Mr. Hockney added "because of the better than expected flow rates achieved from the two wells it is not necessary to re-enter and complete the third well, H3, as previously planned. Instead the Company will now move immediately to the drilling of an exploration well in its nearby Asahan Offshore contract area. We will return to complete the remaining development well on the H field in the future."

He said the Company should be on stream within a month at a rate of around 8500 barrels of oil per day, generating gross annual revenue of US$62 million based on an average price of US$20 per barrel.