Essential Acquires Stake in PEL 27 in Australia

Essential Petroleum Resources has agreed to acquire a 20% interest in petroleum exploration license PEL 27 in the Otway Basin from Beach Petroleum Limited.

PEL 27 covers 240 square kilometers of the north western flank of the Penola Trough, a proven petroleum system. PEL 27 is northwest and updip of the adjacent Katnook, Haselgrove and Ladbroke Grove gas fields and is ideally positioned to trap oil and gas migrating northwards out of the trough. The permit is particularly prospective for oil as prospects within the permit Sawpit 1 recovered oil and Killanoola DW 1 flowed oil to the surface.

Exploration in PEL 27 will commence with the drilling of the Cowrie prospect. Cowrie is a robust structure similar in style to the Killanoola oil discovery; it offers improved reservoir and oil quality, and an excellent seal. Cowrie 1 is expected to be drilled between May and September this year as part of a forthcoming multi-operator drilling program in the Otway Basin.

Essential Petroleum believes Cowrie may contain up to 4 million barrels of recoverable oil. Furthermore, a discovery at Cowrie will confirm the Sawpit Sandstone as an exciting new target and provide Essential Petroleum with immediate other opportunities along the northern flank of the Penola Trough.

Following assignment of the interest to Essential Petroleum, participants in the PEL 27 Joint Venture will be Beach Petroleum as operator with 30%; Origin Energy with 50% and Essential Petroleum with 20%.