Origin All Set to Drill Exploration in Canterbury Basin Permit

Origin Energy Resources, Operator and 100% interest holder of offshore Canterbury Basin permit PEP 38262, advised that on August 21, 2008, it intends to progress into permit Year 4 that carries a commitment to drill an exploration well.

The large Carrack/Caravel prospect complex, located some 65km east of Dunedin in a water depth around 1,000m, has been matured to drillable status in this permit by a tight grid of recently acquired 2D seismic data. The prospect has two distinct structural culminations which are separately referred to as Caravel in the north and Carrack in the south.

Potential reservoir objectives in the Carrack/Caravel prospect are inferred to be provided by the Cretaceous Herbert Formation and Kawau Sandstone, both established hydrocarbon bearing in the nearby Galleon 1 well, drilled by Shell BP Todd Canterbury Services Ltd in 1985. A drill stem test of the Herbert Formation in Galleon 1 flowed gas at 10.6 million cubic feet per day and associated condensate at 2,240 barrels per day (ref Attachment).

The combined areal extent of the Carrack/Caravel prospect is some 300 square kilometers at top Cretaceous reservoir level. The structure is estimated to contain a mean of 750 million barrels of recoverable oil in Herbert Formation reservoirs if it is oil charged, or 2.7 TCF of recoverable gas and 500 million barrels of associated condensate if it is gas charged. Should hydrocarbons also be trapped in the lower Kawau Sandstone reservoirs, recoverable hydrocarbon volumes could more than double.

However, the presence of hydrocarbons or otherwise can only be established with certainty by drilling an offshore exploration well.

Commenting on the perceived prospectivity of this permit, Origin's Executive General Manager Exploration, Rob Willink said, "By any comparative standard, the Carrack/Caravel prospect complex is very large and is located in an established petroliferous basin. That said, a well on this prospect remains subject to considerable technical risk. Furthermore, it will require a rig with a deep water drilling capability to drill. Such rigs are not only expensive to contract, but difficult to source in the current tight global rig market."

Origin is currently seeking other companies that may wish to participate in this high risk, but potentially high reward exploration opportunity. In parallel, the company has commenced dialogue with a number of drilling management services companies and the operators of nearby permits that are facing drilling commitments in a similar time frame, to secure a suitable rig.