Carnarvon Joint Venture in Thailand Increases Production

The Wichian Buri-1 (Deep) exploration well, in which Carnarvon owns 40% interest, has been abandoned after testing small amounts of natural gas with approximately 750 barrels of water per day from an open hole volcanic interval between approximately 1,500 to 1,590 meters. A second, shallower, 10 meter thick volcanic section at approximately 1,200 meters, that had oil shows whilst drilling but no lost circulation, was perforated and found not to contain moveable hydrocarbons. WB-1 (Deep) will now be completed as a future water disposal well.

In the latter half of 2008 the Joint Venture plans to drill several Wichian Buri F sandstone development wells north of WB-1 (Deep) and will again target the same potential volcanic reservoirs in a structurally higher position as mapped on seismic data.

Drilling is anticipated to commence in five days on the moderate risk, high impact L44-R exploration well which is located approximately 10.5 kilometers south of the producing NSE oilfield and within the main volcanic reservoir play fairway. The well is targeting an approximately seven square kilometers structural closure with multiple potential volcanic reservoir targets between 800 to 1,300 meters. Drilling is anticipated to take up to 24 days.

The two contracted rigs have been operating continuously throughout most of 2007. Some necessary maintenance is currently being carried out resulting in one rig currently drilling. It is anticipated both rigs will be fully operational again shortly.

As a result of additions to infrastructure and oil transport facilites by the operator Pan Orient, production has grown as anticipated and is currently approximately 7,350 bopd gross (2,940 bopd net to Carnarvon) with a current fleet of 41 tankers transporting oil to the Bangkok refinery. Six additional tankers are anticipated to become available shortly, which will increase production to approximately 8,450 bopd gross (3,380 bopd net to Carnarvon) and further tanker capacity has been arranged that is anticipated to increase production to the current field production capacity, from existing wells, of approximately 10,000 bopd gross (4,000 bopd net to Carnarvon) by late February to early March.