Marino-1 Plugged as Sub-Commercial Oil Discovery

Drillsearch has provided an update for the Marino-1 well. Following evaluation of the results from the drillstem test the joint venture has reached the conclusion that the Birkhead oil reservoir as penetrated in Marino-1 is too tight to produce oil at a commercial rate. Marino-1 will therefore be plugged and abandoned as a sub-commercial oil discovery.

A drillstem test (DST-1) was conducted late Sunday, August 30, over a six meter interval (1649-1655m) within the Birkhead Formation that had exhibited oil shows during drilling. Approximately 3.5 barrels of oil (48.2 degrees API at 60 degrees F) were recovered from the drillpipe after a 3 hour flow period. Extrapolation of this recovery volume and independent measurement of inflow rates from the DST pressures both indicate that the zone is not capable of producing oil at a commercial rate.

Marino-1 is the second of a two-well program in PEL 91, following the Chiton-1 oil discovery. Drillsearch holds a 60% interest in PEL 91, the Marino-1 well and the Chiton-1 oil discovery. The well is being operated by Beach Petroleum (40%) using the Ensign Rig# 30. Marino-1 was spudded on Saturday, August 22, 2009, and reached its total depth of 1941 meters on Friday, August 28.

Brad Lingo, Managing Director, said, "We are very encouraged by this result. Although Marino-1 encountered poor reservoir in the pay zone, deeper in the Birkhead there was much better reservoir development and a cleaner sand package. Since the success of Victoria Petroleum in the Birkhead 'channel-sand' play in PEL 104 and PEL 111 to the north of us, we have been extremely interested in pursuing this significant trend in PEL 91. The joint venture will need to make some significant decisions on how and where to follow-up this Birkhead oil discovery over the remainder of PEL 91. This does give us even more encouragement to expand the 3D seismic coverage and intensify our exploration efforts in PEL 91, focussing on both the Namur and Birkhead objectives."