AWE Accelerates Search for Gas in Southeast Australia

AWE Ltd has committed to a major new program of offshore petroleum exploration activity in a bid to substantially increase its capacity to supply more gas to the growing south east Australian energy market.

AWE and its co-venturers in the offshore Bass and Otway basins are already producing the equivalent of around 30 per cent of Victoria's daily gas needs but aim to be in position to expand production capacity even further.

Now AWE and its co-venturers will add to their exploration commitment by conducting a major new 3D seismic survey in permit Vic/P 44 in the offshore Otway basin. The survey, costing $A19 million, will start in May this year and is expected to lead to the development of a number of prospects and leads which could add substantially to the natural gas inventory of the region.

AWE and its co-venturers currently produce more than 200 Terajoules ("TJ") of gas per day from the Yolla (AWE 30%) and Casino (AWE 25%) gas fields which contain over 550 Petajoules ("PJ") of gas and 28 million barrels of associated LPG and condensate.

In the last three years AWE and its co-venturers have made three new gas discoveries at the Henry and Martha fields in the Otway basin and the Trefoil field in the Bass basin, and conducted major 3D and 2D seismic surveys.

This new 3D seismic survey adds to the $A1.1 billion AWE and its co-venturers have spent on petroleum exploration and development in the Bass and Otway basin regions over the last five years and adds to the A$40 million already committed to drill the Netherby-1 and Pecten East-1 exploration wells in the Vic P44 area at the end of 2007.

The 700 square kilometer, Otway 3D seismic survey will adjoin an earlier 3D survey area over the Pecten High trend that incorporates the Casino, Henry and Martha gas fields. The new survey will cover the Champion High trend which includes the large Champion South prospect and several adjacent prospects and leads.

AWE Ltd managing director Bruce Phillips said:

"The Bass and Otway basin acreage held by AWE has potential for significant additional gas reserves.

"To date AWE has a 100% success rate in its offshore Otway basin drilling program and we are optimistic about the upcoming exploration drilling on the Netherby and Pecten East prospects later in 2007. The new 3D seismic survey is designed to delineate additional drilling prospects and extend the gas fairway to the west of the existing Casino, Henry and Martha gas fields.

"In the Bass basin, AWE sees potential for gas developments beyond the first stage of the BassGas project where the Yolla oil and gas field is currently producing. AWE and its co-venturers have recently delineated the nearby Trefoil gas and condensate field with a large 3D seismic survey and conceptual development studies for the field are underway.

"AWE is pleased to be contributing clean energy to the communities of southeast Australia and is delighted to hold meaningful equities in such prospective acreage close to the largest domestic gas market in Australia.

"In the future we look forward to participating in the gas market opportunities emerging in the region."

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