Woodside to Drill More Wells Offshore Mauritania

Woodside has signed a rig contract for the Transocean, Inc. drill ship Deepwater Discovery to drill offshore Mauritania during 2002. The contract allows for the drilling of two firm wells plus options for two additional wells commencing in the third quarter 2002. The rig is expected to arrive in Mauritania within during August or September 2002 with the exact date to be determined by the completion of the rig's current program in West Africa.

The Joint Venture participants and the Mauritanian authorities have agreed on the 2002 work program, which includes the acquisition of extensive 3D seismic and the drilling of up to four deep water wells (two firm and two contingent).

Chinguetti Oil Field Appraisal (Block 4, PSC Area B) – One firm step-out exploration well on the field is planned as the first well in the program. A second contingent well may be drilled as the third well in the Deepwater Discovery field to fully delineate the size and scope for oil production in the Chinguetti Field. Testing equipment will be available to conduct an oil production test on one of the appraisal wells as warranted.

PSC Block 6 (Area C) Exploration Well –A firm well is to be drilled to test the Lead 4 structure in Block 6, to the north of Area B. The primary target at Lead 4 comprises a sand channel system of Cretaceous age interpreted from 3D seismic. The flank of this prospect was partially tested by Shell in the 1970s with small quantities of oil recovered from wireline testing.

PSC Area B Exploration Well (Chinguetti vicinity) – The intention is to drill one of the identified exploration prospects that are located within 25 kilometers of the Chinguetti oil discovery. Currently two prospects are being considered, pending completion of further seismic acquisition and interpretation. This well is therefore being carried as contingent pending the completion of this work and a decision by the Joint Venture to drill one of the prospects in the 2002 drilling program.

Prospects being considered have similar aged reservoir sands to Chinguetti. If the new exploration well is a discovery, it could be linked to the Chinguetti production facility, thus enhancing the project economics.

Acquisition of large 3D seismic is currently in progress as follows: PSC Area A - 900 square Kilometers; PSC Area B 515 square kilometers; PSC Area C (Block 2) 1,000 square kilometers. This new seismic data will further delineate the petroleum prospectivity of the deepwater basin in areas adjacent to the existing 3D seismic data, and identify additional prospects for drilling in 2003 and beyond.

Under a farm-in agreement signed with Energy Africa in January 2002, the bulk of the 3D survey in Block 2 is to be funded by Energy Africa which will earn 20% interest in that area. Hardman will retain a 28.8% interest in Block 2. The 2002 work program will add considerably to the understanding of the Mauritanian deepwater basin and is aimed at upgrading the prospectivity of this new oil province. In particular, additional drilling of the Chinguetti Field will allow an accurate estimation of the recoverable oil volumes in the structure and the economic viability of the project.

In January 2002, Woodside advised that the Scope For Recovery reserves based on the results of only the Chinguetti-1 well were 65 million barrels (recoverable). It should be emphasized that this estimate is based on a risked reserve estimate, whereby parts of the field which have not yet been evaluated by drilling have had a risk factor applied, thereby reducing the volume estimates. Studies of the Chinguetti Field by Hardman have indicated that the Most Likely (P50) technically recoverable volume for the primary reservoir target only (A Sand) is in excess of 100 million barrels. There may also be further potential in deeper Tertiary sands below the A Sand, which was not encountered in the Chinguetti-1 well, and also in the B Sands which contained a 7-meter gas column in Chinguetti-1. It is therefore encouraging that development studies conducted to date have indicated that the recoverable reserve volume required for a "stand alone" deep water development at Chinguetti could be much less than 100 million barrels.