Bounty Increases Stake in White Sands Petroleum

Bounty Oil & Gas has provided a short term loan of US$1 million to White Sands Petroleum Pty Ltd to expedite purchase and delivery of a state-of-the-art hydraulic rig which is planned to undertake a number of drilling campaigns for operators in South Australia and Queensland (including drilling in the Utopia Oil field in ATP 560P). The loan is secured against the rig. In return for providing the loan, Bounty will earn an additional 10% interest in White Sands, raising Bounty's stake in that company to 25%.

Bounty is finalizing arrangements for the purchase of a 40% interest in the Utopia Oil field in ATP 560P, Queensland (Bounty announced its agreement to acquire this interest on December 17, 2004) and is progressing discussions with field operator Oil Wells Inc of Kentucky and White Sands whereby White Sands can earn an interest in Utopia in return for the acquisition of 3D seismic and the drilling of a minimum of two horizontal development wells. Oil Wells Inc of Kentucky holds a 60% interest in the field.

On completion of Bounty's purchase, partners in the Utopia Oil Field will be Oil Wells Inc of Kentucky as operator with 60% and Bounty Oil and Gas with the remaining 40%.