Anzon to Proceed as Planned with Basker Field Development

Electric logging of Basker-2 is being completed and preparations are being made to set a 178mm (7") liner at the total depth of 3,241m MDRT prior to completing the well for production.

The preliminary analysis of the electric logs, pressure surveys and sampling of the well has confirmed the decision to proceed with development as originally planned. The Basker-2 productive horizons came in more than 20 metres high to Basker-1 with net pay thickness being similar to Basker-1. Some 45 valid pressure tests have been completed and fluid samples are being obtained. The water pressure gradient throughout the section indicates communication with the Gippsland Basin aquifer. Reserves will be reviewed independently with results not anticipated for four to six weeks.

Oil samples have also been recovered to be used for fluid assays required for the marketing of the crude oil.

After the liner is run and cemented the selective "intelligent" completion will be run. Initial clean-up flows from the well are anticipated in seven to ten days, assuming trouble free operations.

The participants in the VIC/RL6 Joint Venture are Anzon Australia Limited as operator with 62.5% and Beach Petroleum Ltd with 37.5%