Victoria Petroleum Sells Stakes in Cooper Basin PEL 104

Victoria Petroleum has entered into agreements with Impress Ventures Limited and Kalrez Energy Ltd. whereby Impress and Kalrez will each earn a 12.5% interest in PEL 104 by each contributing to 25% of the cost of an accelerated exploration program planned to be carried out over the next 12-15 months, of seismic reprocessing, 150 kilometers of new seismic and the drilling of two wells.

With this farmin, Victoria Petroleum NL will reduce from an 80% interest in PEL 104 to a 55% interest in PEL 104 and will be contributing 30% of the cost of the accelerated work program.

PEL 104 covers an area of 1,069 square kilometers and is immediately adjacent to the western edge of 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 310 billion cubic feet of gas. The block also surrounds the Fly Lake Oil & Gas Field with recoverable reserves of 67 billion cubic feet of gas and 2 million barrels of oil and the Callabona Jurassic oil field production license.

PEL 104 is considered highly prospective for 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.

Twenty eight prospects and leads with Jurassic and Permian target horizons are indicated from preliminary mapping in the block with the chance for a major Permian stratigraphic pinchout trap in the western portion of the block.

The extensive database of 2,117 kilometers of 2D seismic and 12 square kilometers of 3D seismic provides a strong initial database for the delineation of prospects within the block. Only 3 wells have been drilled in the Permit, with two wells with interpreted by passed gas pay and the other well with oil shows.

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.

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.

Victoria Petroleum's large equity interest of 55% 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 63% oil discovery success rate.

Following the above farmin to PEL 104, Victoria Petroleum NL retains a very significant prospective "core" exploration acreage position in both the South Australian and Queensland portions of the Cooper Eromanga Basin, the South Australian PEL 104 interest adding to Victoria Petroleum NL's existing interests in south west Queensland in ATP 589P.