ARC Energy Spuds Evandra 1 Exploration Well

ARC Energy reports that the exploration well Evandra 1, operated by ARC and located in the onshore Perth Basin Production License L1, has been spud using the Century 11 rig. The well is located approximately 12.5 kilometers southeast of the town of Dongara and 3 kilometers south east of the Jingemia Oil Field.

The depth to the prognosed top of the primary objective Dongara Sandstone is approximately 2,203 meters measured depth. The proposed total depth of the well is 2,260 meters measured depth and it is expected to take 13 days to drill on a dry hole basis.

Participants in L1 and L2 (excluding the Dongara, Mondarra and Yardarino fields) and Evandra 1 are ARC Energy Limited as operator with 50% and • Origin Energy Developments Pty Ltd with the remaining 50%.

Managing Director's comment:

"Evandra 1 is the first exploration well to be drilled on the basis of the recently acquired Denison 3D seismic survey. Although the potential reserves are modest, the structure is robust and seismically well defined with the principal risk interpreted to be reservoir thickness and quality. In the event the well is successful it will be able to be quickly brought onto production (subject to the usual regulatory and joint venture approvals), using the joint venture's Mobile Early Production System (MEPS). MEPS has been specially designed and constructed to allow the early production of oil discoveries made in the course of the drilling program on the Denison 3D survey."