Paradise Downs Coal Seam Gas Project Being Tested

Victoria Petroleum N.L. ("Vicpet") has been advised by Roma Petroleum N.L. ("Roma") the operator for PL 171 and the Paradise Downs CSG (Coal Seam Gas) Joint Venture, that following coring of the Paradise Downs-2 well to a total depth of 504 metres, wire line logs have been run and the well plugged.

Seven coal cores at various intervals in the Walloon Coal Measures between 118 metres and 462 metres have been taken for desorption tests to determine the gas content of the coals in this northern section of Petroleum Lease 171 in the Surat Basin.

Paradise Downs-2 is the second appraisal well to be drilled in 2008 in the Paradise Downs CSG Project. The Paradise Downs CSG Project is located approximately 7 kilometres south of the town of Wandoan and 7 kilometres north of Lawton-1, a well in the Lawton CSG Joint Venture project which flowed gas to surface on test from the Walloon Coal Measures when drilled by Queensland Gas Company Limited ("QGC") in 2001.

The operator has advised that Netherland, Sewell and Associates, Inc. of Dallas, USA, have been engaged to advise on obtaining certification of the coal seam gas resources in PL171. Commenting on the completion of the coring operations at Paradise Downs-2 CSG well, Vicpet managing director John Kopcheff said, "Vicpet is pleased to be participating in the Paradise Coal Seam Gas Joint Venture Phase 1 appraisal drilling program, a follow up to the 3 CSG wells drilled in 2001 in the central part of PL 171 in the Lawton CSG Project appraisal drilling program by QGC.

"We look forward to receiving from the operator the Netherlands, Sewell and Associates advice on obtaining certification of the coal seam gas resource in PL 171."

The planned timing for the commercialisation of the Paradise Downs and Lawton Coal Seam Gas projects coincides with the projected increase in demand for LNG feedstock and resultant upward pressure on prices for natural gas on the Eastern seaboard.

Added to the CSG interests Vicpet has in the adjacent QGC operated permit to the south, ATP 574P and the Bow Energy Limited operated Don Juan CSG Project in ATP 771P to the west, where up to a total further 23 CSG wells are planned to be drilled in 2008, Vicpet is well placed to achieve its aim of making its CSG interests in the Surat Basin of Queensland a strategic "core focus gas area" in addition to its growing exploration and production interests in the "core focus oil area" of the Cooper Basin.

Successful gas reserve certification for Vicpet's CSG interests in the Surat Basin, Queensland or any successes in Vicpet's oil exploration drilling program with Santos due to commence in April 2008 in its Queensland Cooper-Eromanga Basin permit, have the potential to add shareholder value over the next 12 months."