Pryme to Drill Mississippi Exploration Well With Belle Oil

Pryme Oil and Gas will drill the first well in an exploration program with Belle Exploration Inc., the operator of Pryme's producing assets in the Wilcox Basin.

The Hogue Estate "GT" No.4 well is located in the Glasscock Island area of Adams County, Mississippi. Pryme has the opportunity to participate with Belle in a series of oil exploration wells in addition to Pryme's development/step-out wells in the LaSalle Parish Project. In addition to the Hogue Estate "GT" No.4, two other oil exploration wells are planned for later this year. If successful, the wells will add reserves to Pryme's revenue from LaSalle Parish.

The "GT" No.4 well is to be drilled to a depth of 6,200 feet targeting the Tew Lake formation and other Wilcox sands. The prospect area is in a trend that exhibits classical solution gas and water-drive, long-term oil production.

"The Hogue Estate project is an addition to our suite of exploration assets in neighboring Louisiana," said Pryme Managing Director Justin Pettett. "We are pleased to be working with Belle to further our successful relationship in LaSalle Parish."

Essentially the prospect involves the drilling of an offset well to the "GT" No.1, which Belle drilled and plugged and abandoned in December 2003 when oil prices were in the low US$20 per barrel range. This new test is in a "fairway" of analogous production which is characterized by oil reserves with strong initial flow rates and long-life production. The results of this well are expected in the next 4-5 days.

Pryme has a 20% working interest (15% net revenue interest) in the well and is paying the industry standard "third-for-a-quarter to the casing point" trade to Belle for deriving the prospect.

Pryme Oil and Gas Limited is a fast-growing Australian oil and natural gas producer and explorer with interests in the U.S. The company has an exceptional suite of exploration projects focused on Louisiana, the fifth-largest oil-producing state in the U.S.