Stuart Petroleum Accelerates Cooper Basin Drilling Program

Stuart Petroleum has decided to accelerate its oil drilling program in the Cooper Basin following close on the heels of the recent Toparoa oil discovery.

Stuart plans to drill 12 wells oil wells in its southern blocks by the end of May 2006. The program includes a further two exploration wells, two appraisal wells and eight development wells.

The operator of the Derrilyn Block in PEL 114, Santos Ltd has advised the first well in this program, the Derrilyn 3 development well, spudded on 19 February. The well is situated 90 meters West North West of Derrilyn #1 and is designed as the first offtake point for the McKinlay oil pool in the field. This well is required due to the continued strong performance of the two existing Hutton producers delaying McKinlay production. The McKinlay will be brought into production as soon as practicable.

Meanwhile, the Stuart operated drilling program is set to continue with the drilling of Worrior 4, a development well following hot on the heels of the Toparoa discovery.

Worrior 4 in PEL 93 / PPL 207 will be drilled on the eastern edge of the field to produce oil from the Birkhead and McKinlay oil pools and will appraise the Patchawarra gas and fractured basement oil play in the Pando Formation which recovered oil in Worrior 3.

The recently acquired 3D seismic program continues to uncover exciting follow up opportunities near Harpoono in PEL 113, which is currently producing around 100 bopd. The Harpoono 2 and 3 development wells will be drilled in March/April to drain the Murta reservoir found in Harpoono 1. The joint venture with Beach Petroleum, is planning the exploration well, Rimfire 1 to be drilled in April to test a target 2.8km ENE of Harpoono #1. Rimfire is currently mapped as a structural / stratigraphic trap with the potential to hold P10 oil in place of 2 million barrels. Our geological team is also working on other potential structures identified by the recent 3D seismic in the area.

The aggressive Padulla development targeting a 1 million barrel reserve potential in the south western corner of PEL 113 will commence towards the end of March with Padulla #3 following up the Padulla #2 Murta Formation oil discovery made in 2005. Five Padulla appraisal and development wells will be drilled to determine the extent of the Murta oil reservoir and to provide drainage points.

Development planning is well advanced for the Padulla discovery. Drilling of these five appraisal and development wells will fine tune our thinking on the final development. Production testing of the discovery well, Padulla 2 will commence in April following the completion of the production facility. Padulla is a large structure in area but the formations which host the oil are relatively thin.

An adjacent prospect in PEL 93, Dalray, to the south west of Padulla, will likely be drilled in May following the Padulla program.

The most pleasing aspect of Stuart's past drilling program is that it has uncovered numerous additional highly prospective drilling opportunities right in our own back yard. These opportunities continue to fuel the Company's growth as one of the newest mid cap oil producer in the Australia.