Austral Pacific Names New Senior Execs, Issues Cheal Update

Austral Pacific Energy Ltd. has appointed Thompson Jewell as its new Chief Executive Officer and Derek Gardner as Chief Financial Officer.

"The two appointments reflect the outcome of an extensive international search conducted by global search specialists," said David Newman, Astral Pacific's Chairman. "We are delighted to have people of their skills and experience to lead Austral Pacific."

Chief Executive Officer

Jewell is a Canadian and has some thirty years of experience in the international oil and gas industry, having worked in the Middle East, the United States, the United Kingdom, Australia and Canada. Educated at the University of Alberta, Jewell holds a B. Sc in geophysics.

Jewell has held a variety of technical and senior executive roles in previous positions with Amoco and Santos. Most recently he has been responsible for the strategic planning and execution of building an offshore exploration business in Australia and prior to that was responsible for a $100 million per year exploration and appraisal budget of Amoco in the Deep Water Gulf of Mexico. Thompson was also the President of Amoco Oman. He will take up the appointment with Austral Pacific from 1 May 2007 when he will become a member of the Board of the company.

Chief Financial Officer

Gardiner replaces Bruce McGregor, who resigned to pursue other opportunities. He is a member of the Institute of Chartered Accountants in New Zealand and also the Institute of Chartered Secretaries. He is a New Zealand citizen and has worked in the oil and gas industry since 1987 where he has held senior planning and finance roles for Shell in New Zealand, Brunei, Malaysia and Australia.

Gardiner joins Austral from Shell Development Australia where he has been Finance and Planning Manager, a member of the management team and a director of the Company. He oversaw the implementation of the Sarbanes Oxley project and IFRS for Shell Development Australia. He was also responsible for developing the finance strategy to enable Shell Development to meet significant expansion plans. His various roles with a number of Shell companies bring to Austral broad experience covering governance, operational and commercial issues (especially in the joint venture arena), balance sheet management (including capital discipline), due diligence and subsequent integration of acquisitions and strategic planning.

Cheal Oil Field Development

Production facilities for the Cheal oil field in onshore Taranaki, New Zealand, are being upgraded. This will allow for the realization of the considerable upside potential seen within the permit area.

Newman said that the changes in scope of the development were primarily made to ensure continuous, efficient production of the waxy crude at minimal operating cost.

"The budget has been revised to approximately US$30 million and reflects the cost of upgrading the facilities and includes five pipelines linking the Cheal B site to the A site where the production station is being constructed," he said. "The revised budget estimate also includes the cost of a gas pipeline from the A site to the Waihapa production station for gas and LPG sales. The cost of the Cheal B4 well, which drilled a target in the Moki formation and will be side tracked to Mt Messenger targets once the B site is tied in to the production station, is included. The pipelines between the A and B sites have been upgraded to handle hotter fluids than had been foreseen in the original estimates."

Remaining recoverable 3P (proved, probable and possible) reserves were estimated by the Company's independent consulting engineers in December, 2006 to be 4.1 million barrels of oil within the area of the Cheal A and B sites.

"We also see upside reserve potential beyond the current field boundaries within the Cheal mining permit (PMP 38156) particularly to the northwest, across a fault, towards Cardiff where the Cheal B4 well penetrated oil saturated sands at the Mt Messenger level," Newman said.

The five development wells drilled so far -- the Cheal A3 and A4 discovery wells and three wells at the B well site -- have total production capability of 1200-1500 barrels of oil per day (bopd). Additional production will come from drilling of the A5 and A6 wells.

Newman said Austral has secured a 500-bopd throughput agreement for the current, early production and is investigating several alternatives to access available storage at or near Port Taranaki, New Plymouth. "I expect full production of about 1900 bopd to be achieved during the third quarter. The Cheal project remains very profitable, and with the upgraded facilities, we can take advantage of any incremental production," he concluded.