Great Artesian Applies for Production License for Smegsy Fld

Great Artesian Oil and Gas, as operator of the Smegsy Block Joint Venture, wishes to advise that the Joint Venture will apply for a Petroleum Production License (PPL) encompassing the Smegsy-1 new field gas discovery made during 2004. This PPL will facilitate the production and sale of gas later this year once a gas-sales agreement is in place. Negotiations on the gas-sales agreement, which will be the first for the new round of Cooper Basin explorers, is anticipated to be completed shortly.

Smegsy-1 is located approximately 4 km from existing gas-pipeline infra-structure in PEL 106 of the Patchawarra Trough, South Australian Cooper Basin. Native title and environmental clearances along the proposed tie-in pipeline route are being obtained and a contract has been signed with Santos Limited for Front End Engineering and Design (FEED) of the tie-in pipeline.

Smegsy-1 produced gas flows from two intervals within the lower Patchawarra Formation at rates of up to 8 million cubic feet per day. Optimum production flow rates will be determined during an initial extended testing phase once the pipeline connection has been made.

Interests in the Smegsy Block Joint Venture are Great Artesian Oil and Gas Limited (GOG – Operator) 75% and Enterprise Energy N.L. (EPE ) (through wholly owned subsidiary Traditional Oil Exploration N.L.) 25%.