Austral Pacific Updates Testing Progress for Cardiff & Cheal Wells

Cardiff-2A well continues to lift gas plus condensate, oil and completion fluid, as the upper two test zones clean up. A continuous gas flare is running, with significant amounts of associated oil and condensate. Gas rates exceed one million cubic feet per day, with pressures and volumes rising steadily. Fluid rates are several hundreds of barrels (of mostly drilling/frac fluid) per day. The main pay zone, deeper in the well, remains shut-in by the sand within the completion tubing. Due to damage incurred on the coil tubing unit while it was being used elsewhere for another operator, it may be some time before this zone can be accessed. The well is being allowed to continue to clean up, with oil and condensate being diverted to storage tank.

Production of oil from the Cheal-A3X well is continuing at stable rates with more than 20,000 barrels of oil and negligible associated water having been produced since testing of this well commenced in late May.

The Supplejack-1 well in PEP 38741 (Austral : 30%, operator) spudded on July 21. The ODE 19 rig will take three weeks to drill to a Target Depth of 2600m (8,500 feet) to test targets at Urenui and Moki levels defined by the Kaimata 3D seismic survey.

At the company's Onshore East Coast Basin PEP 38330 following interpretation of recent seismic, Austral and its joint venture partners considered the Wharekaka Prospect posed a high risk of gas discovery, with its attendant problems; and given that the regulatory agency would not allow additional time in which to seek other funding parties to diversify the discovery risk, the joint venture parties are now relinquishing this acreage. CEO Dave Bennett commented, "While unfortunate, this will allow Austral to concentrate more on its core opportunities in the Taranaki Basin, and on its bigger upside exploration projects in Papua New Guinea." Austral has previously drilled 6 wildcat wells and acquired several seismic surveys in the East Coast Basin of New Zealand.

The Company and its partner Rift Oil have now secured a heli-portable rig, which will be commissioned in the US over the coming months, and mobilized to Papua New Guinea to drill the Douglas-1 well (Austral 35%, Operator) before end 2005. Ownership of this rig will position the Company to drill follow-on wells and other prospects in that country.