Tap Oil Says Amulet Sidetrack Successful

The Amulet-1 exploration which was spudded on May 24, 2006 encountered a 26 meter oil column. Oil samples were recovered and indicate a light oil similar to that produced at the nearby Talisman oil field by Marathon in the early 1990's.

The Amulet oil field discovery is located in Production License WA-8-L, in the Dampier Sub-basin, of Western Australia, 34 kilometers north-west of the Legendre oil field and production facilities.

A preliminary interpretation of the reservoir indicates that it has the potential to flow oil at rates of up to 10,000 bopd using a horizontal well. A full core analysis will however be required to confirm this.

The pre-drill planning of this well included the alternative to core the well as opposed to flow testing it. This is because core data, when combined with pressure testing and sample recovery is considered to be one of the most effective methods of evaluating reservoir potential and flow characteristics for a development decision.

Consequently, on June 7, 2006 Amulet-1 CH was drilled and a full 34 meter core section was recovered. Oil was dripping from this core when it was laid out on the rig floor.

The Amulet-2 sidetrack well was drilled on June 9, 2006 to test the extent of the Amulet structure to the south east and investigate the possibility of additional oil reservoirs towards the basin bounding fault.

This well confirmed both the south eastern extent of the lower oil pool and intersected another oil pool in a structurally higher sand. This sand contained a 6 meter oil column without a water contact and better reservoir quality than the lower sand.

The size of the lower oil pool is estimated to be around 24 mmbls of oil in place. Recoverable volumes of up to 10 to 15 mmbls are estimated at this stage however this will need to be confirmed in due course when the core data mentioned above has been thoroughly analyzed and development scenarios determined.

Encountering oil in the second sand was an excellent result and it is seismically mapped to thicken up-dip to the east. Moreover there is potential for yet more oil bearing sands east and up-dip towards the fault. Establishing the eastern extent of the known upper oil pool and the existence of additional sands will require another well and the Joint Venture is in discussions on an additional rig slot at this stage.

The results of this drilling campaign have been very successful and at this early stage, a commercial development appears achievable. Tap is enthusiastic at the potential for considerable additional volumes from the upper oil pool and other seismically mapped events to the east. As the data is further analyzed, Tap will provide updates along with the timing of a follow up well.

Santos did not participate in the original Amulet-1. Should a development decision be made by the Joint Venture, Santos's election to back in to this campaign requires it to pay the original well participants 15 times the cost of Amulet-1 from first oil production revenues. Tap's pro-rata share of this is estimated to be around $30 million.

Tap's Managing director Paul Underwood said "this is an exciting oil discovery at a time of very high oil prices. While more data is still required, at this stage a commercial development looks achievable with meaningful additional upside potential should more oil volumes be established to the east. Further, Tap is extremely well positioned to fund new developments without issuing new shares with $100m cash at bank and zero debt".

WA-8-L Participants are Tap (Shelfal) Pty Ltd as well manager with 20%; Santos Limited as permit operator with 37.3684% and Kufpec Australia Pty ltd with 42.6316%.

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