Petsec to Spud Eugene Island Well in March

Petsec Energy announced that drilling plans for its Eugene Island 310 prospect have been brought forward after securing a rig to drill the prospect, in 204 feet of water located 87 miles offshore Louisiana, in the Gulf of Mexico and 45 miles to the southeast of the Company's Vermilion 258 gas production platform.

The Company holds a 50% working interest in the lease (39.91% net interest before payout and 30.93% net interest after payout). Royal Exploration Company is the operator of the well.

Drilling is expected to commence in early March 2007 to test a 10-20 Billion cubic feet of gas equivalent (Bcfe) target, both gas and condensate, (4-8 Bcfe net to Petsec Energy before payout). The target is updip to an undeveloped gas and condensate discovery made by Transco in 1977. It is anticipated that a successful well could be brought into production towards the end of 2007.

Eugene Island is one of three wells planned to be drilled in the Gulf of Mexico in the first quarter of 2007. The other two wells are planned for Mobile Bay 994, commencing in mid February. Also in mid February, Petsec Energy plans to commence its 6-9 well drilling program onshore Louisiana at the Company's Moonshine Project.

Petsec Energy Ltd is an independent oil and gas exploration and production company listed on the Australian Stock Exchange. Its focus of operations is on gas in the shallow waters of the Gulf of Mexico and onshore Louisiana Gulf Coast region of the US, and on oil in the shallow waters of the Beibu Gulf off the south coast of China.

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