Petsec Kicks Off Moonshine Program

Petsec Energy commenced its onshore Louisiana drilling program at the Moonshine Project, St James Parish, La., with the announcement Thursday of the spud of the Bowie Lumber Associates No. 001 well at the Skywagon Prospect. The proposed total vertical depth is 12,000 feet or 3,658 meters.

The Moonshine Project covers a 60,000-acre area located approximately 50 miles (80 kilometers) west of New Orleans on the west bank of the Mississippi River.

Prior to Petsec's acquisition of its interests in the Moonshine Project, less than half of the block had been surveyed with 2D seismic, and no previous 3D seismic had been acquired.

Petsec completed a 3D seismic survey over the Moonshine Project area in 2005 and during 2006 mapped a number of gas and oil prospects, which are expected to be tested over the next 2 to 3 years.

Petsec anticipates participation in 6-9 wells on Moonshine in 2007 to target some 20 billion cubic feet of gas (Bcfe) net to Petsec. The exploration risk of the initial wells in the program is considered to be generally higher than the Company's Gulf of Mexico prospects drilled to date.

The Company holds a 50% working interest (36-37.5% net) in the Moonshine joint venture area and is the operator.

The prospects to be drilled in 2007 are less than 12,000 feet in depth, and have target sizes between 5 Bcfe and 15 Bcfe of gas. The wells are expected to take about three weeks to drill, with production anticipated within 4 to 5 months of discovery as there is existing pipeline infrastructure in the surrounding area where approximately 340 billion cubic feet of gas and 7 million barrels of oil have been produced to date.

Moonshine is the Company's first significant onshore USA exploration program.

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 USA, and on oil in the shallow waters of the Beibu Gulf off the south coast of China.