Drillsearch Unlocks Modest Oil Discovery in Cooper Basin

Drillsearch Energy announced that Chiton-1, in PEL 91, is an oil discovery. Logging While Drilling (LWD) data indicates that the well has encountered a 5.5 meter oil zone in the Namur Sandstone.

Chiton-1 is the first oil discovery within PEL-91. An initial estimate of the potential resource based on this data, indicates recoverable oil reserves in the field in the range 0.04 to 0.39 million barrels (P90 to P10) with a P50 reserve of 0.12 million barrels. After completion of drilling operations, the well will be cased for future production and further evaluation of relevant data will be carried out to refine the resource estimate. Chiton-1 reached a total measured depth of 2010m and the drilling operation is currently pulling out of the hole to run casing. No further hydrocarbon shows have been encountered.

Chiton-1 is the first of two wells being drilled to test two prospects in PEL 91 along the 'oil fairway' on the western flank of the Patchawarra Trough. The second well in the program is Marino-1 located approximately 8km due north on the Chiton oil discovery. Both prospects are robust structural traps matured for drilling with the benefit of data from the Modiolus 3D Seismic Survey. The primary objective for both wells is the Namur Sandstone that has proved to be a prolific oil producer along the same trend immediately to the south in PEL 92. Secondary objectives are within the Birkhead Formation that is productive immediately to the north in PEL104 and the Poolowanna Formation that is also productive in PEL92 to the south.

Following completion of drilling operations at Chiton-1, the Ensign-30 drilling rig will be moved to commence drilling the Marino-1 prospect.

Working Interests in the Chiton-1 well and the Marino-1 well consist of Drillsearch Energy Limited with 60% and Beach Petroleum Limited with 40%.

Managing Director Brad Lingo stated, "We are extremely pleased with this result and the Chiton Oil discovery conclusively demonstrates that PEL 91 is within the oil migration fairway that has shown to be so prolific in the adjacent PEL 92 and PEL 104 permits. This discovery, although modest in size, effectively addresses one of the principal risks Beach and Drillsearch indentified prior to drilling. The discovery significantly reduces the risk of oil charge for other prospects in block and gives us increased confidence as we move forward. Following completion of drilling the Marino-1 Prospect, we will certainly be following up with Beach to discuss the next phase of work in PEL 91 and we will be looking to expand the 3D seismic survey coverage in PEL 91 as it is so critical to exploration and drilling success in the area. This discovery is a clear demonstration that the Drillsearch-Beach Joint Venture can deliver positive results for shareholders and I look forward both our companies expanding this success throughout the rest of PEL 91 and as we move forward with development of the gas-condensate discoveries in the adjacent PEL 106."