Stuart on Track for Record Production

Stuart Petroleum confirmed at its Annual General Meeting that the company was on track to meet its production forecast of up to 900,000 barrels. Stuart Petroleum Managing Director, Mr. Tino Guglielmo said "This will be a new record for Stuart, consolidating another year of growth and building on the financial strength of the Company."

Stuart has averaged A$70 per barrel, after hedging, for oil sales so far this financial year. This represents a gross margin of around A$40 per barrel. Production to the end of October totaled approximately 260,000 barrels. After a record 2004/05 Stuart's balance sheet contains cash and receivables as of today of $13 million with no debt.

Mr. Guglielmo also said that Stuart intended to fast track the development of its 100% owned Padulla field recently discovery on the Dirkala Ridge.

"The Padulla development 20 km south west of the Worrior oilfield, will initially consist of the drilling of four wells and a further appraisal well. The field is likely to contain around one million barrels of recoverable oil," Mr. Guglielmo, said today. "This field will have a material impact on Stuart's business." The multi well development program should boost Stuart's production in 2006.

Padulla #1 is now likely to be brought onto production via an extended production test following completion and fracture stimulation prior to Christmas.

Stuart has recently completed the Arwon discovery which is being connected to the Worrior oil facility. "Arwon is our sixth oilfield in the Basin and Padulla will be our seventh," Mr. Guglielmo said.

Mr. Guglielmo added that Stuart had commenced drilling the nearby Hiraji oil target, a shallow structure 4.5 km from and on trend with Padulla. Stuart is currently also drilling the 100% owned Harry No.1 oil and gas exploration well in the northern part of the Cooper Basin.