Gippsland Petroleum Expects Permits Awards for Madagascar Acreage Soon

Gippsland Offshore Petroleum has applied for two high potential offshore exploration permits from the Government of Madagascar. The permits are expected to be awarded soon to GOP and its joint venture partner, East Africa Exploration Limited of Dubai.

Bids for the acreage were submitted in December 2006 in the Government's licensing round and representatives from both companies were invited to present their bid and negotiate the contract terms in February of this year. The Office for National Mining and Strategic Industries (OMNIS) expect to offer the Production Sharing Contracts to successful companies in the coming weeks.

Gippsland Offshore and EAX submitted bids for the Isle St. Marie Basin on the east of the Island and the Cape D'Ambre area to the north of the Island.

Offshore Madagascar is part of the under-explored East African margin which is generating considerable interest in the oil exploration sector following recent discoveries in the region. Since 2004, Madagascar petroleum exploration levels have increased with MNIS having signed PSCs with ExxonMobil, Vanco Energy, Sterling Energy, Vuna Energy, Aminex and Tullow.

The patented FALCON airborne gravity surveying technology will play an important role in winning the exploration acreage as it will be crucial to geologically mapping these large, frontier areas. The Isle St. Marie encloses 20,000 square kilometers and the Cape D'Ambre bid area encloses 16,000 square kilometers. The large areas will be explored over an 8 year period with drill or drop well obligations in the final phase of exploration. In line with GOP's strategy to fast track the exploration and targeting process, the JV will be commencing both the airborne geophysical and seismic data acquisition as soon as practical after the signed of the PSC.

Early mapping indicate excellent opportunity for oil and gas accumulations in both areas.

At the present time, there is an estimated 20 billion barrels of oil in the yet undeveloped tar sands and heavy oil accumulations on the island's west coast. With only 10 exploration wells having been drilled in the offshore basins, the area remains largely under-explored.

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