Victoria Petroleum Wins Cooper Basin Permit

Victoria Petroleum was awarded Petroleum Exploration License (PEL) 104, previously known as Cooper Basin Block CO99-E, part of the ex-Santos released acreage opened for bidding to the industry in November 1999.

PEL 104 covers an area of 1,069 square kilometers and is immediately adjacent to the Tirrawarra Oil Field, the largest oil field in the Cooper Basin and onshore Australia with estimated recoverable reserves of 70 million barrels of oil and 340 billion cubic feet of gas. The block is also immediately adjacent to the Fly Lake Oil & Gas Field and surrounds the Callabona Jurassic oil field production license.

PEL 104 is considered highly prospective for a Jurassic and Permian oil and gas in view of its immediate proximity to producing oil and gas fields and the presence of prospective Permian and Jurassic section within the major portion of the block.The August 2002 Sellicks No. 1 oil discovery by the Beach Petroleum/Cooper Energy consortium 30 kilometers to the south of PEL 104 has provided encouragement for Permian oil potential on the western edge of the Permian Cooper Basin with the reported oil flow on production test of 2,160 barrels of oil per day.

The extensive data base of 2,117 kilometers of 2D seismic and 12 square kilometers of 3D seismic provides a strong initial data base for the delineation of prospects within the block. Only 4 wells have been drilled in the Permit.

Victoria Petroleum has bid a firm 3 year work program of 2 wells, 120 kilometers of 2D seismic and 1330 kilometers of seismic reprocessing as part of its firm work program with an overall work program of 5 wells, 270 kilometers of new seismic and 1,550 kilometers of seismic reprocessing.

A further indication of the high prospectivity of PEL 104 for oil and gas is provided by the expressions of interest in farming into the block that have already been received from industry participants.

The perceived high prospectivity of the block, interest from industry and March 2003 signing of the Native Title agreement for the block should see the first exploration well being drilled in PEL 104 in late 2003 ahead of the committed work program drilling schedule.

Victoria Petroleum's large equity interest of 80% in this highly prospective Cooper Basin block provides an excellent first entry into the South Australian portion of the Cooper Basin where the latest round of 2002 drilling on Santos released acreage has an 50% oil discovery success rate.

An active exploration drilling program of up to 10 wells planned over the next 9 months for the South Australian part of the Cooper Basin by current successful explorers, Beach Petroleum Limited, Stuart Petroleum Limited and Cooper Energy NL, will further focus the industry's attention on these areas adjacent and in the vicinity of PEL 104.

With the awarding of permit PEL 104, Victoria Petroleum now has a significant prospective "core" exploration acreage position in both the South Australian and Queensland portions of the Cooper Eromanga Basin, the Block PEL 104 interest adding to Victoria Petroleum's existing interests in south west Queensland in ATP 589P.