Drillsearch, Beach to Drill 5 Wells in Cooper Basin

Drillsearch announced the planned drilling of up to five exploration wells in PEL 91 in the Cooper Basin Western Flank Oil Fairway in South Australia. Drillsearch and Beach the operator of PEL 91 have agreed to the program. Interests in PEL 91 are Drillsearch (60%) and Beach as operator (40%).

The PEL 91 Joint Venture has matured five robust drilling prospects in the Western Flank Oil Fairway within the Modiolus 3D Seismic Survey. The prospects are named Baudin, Hanson, Snellings, Arno and Searcy. All of the prospects target intervals within the Namur Sandstone, Birkhead Formation Channel Play, Hutton Sandstone and the Poolowanna Formation - all proven oil plays within the Western flank Oil Fairway.

The drilling program will target, on a combined basis over the five prospects, mean unrisked recoverable prospective oil resource potential of 3.5 million barrels with scope for significantly higher volumes if High side unrisked recoverable prospective oil resource potential outcomes are realized for each prospect. Each of the exploration prospects has a mean unrisked recoverable prospective resource oil potential of between 430,000 to 1.1 million barrels and upside unrisked recoverable prospective resource potential of between 1 million to 2.2 million barrels. The details of the mean and high side unrisked prospective resource potential for each of the oil prospects are shown in the table below and show the scope for higher volumes if upside outcomes are realized.

The Baudin, Hanson and Snellings Prospects are all located within 1-2 km of the Chiton Oil Field and are all primarily targeting the Namur Sandstone which has been proven at the Chiton Oil Field. The Namur Sandstone is a highly productive oil reservoir in the Western Flank Oil Fairway as seen in the recent Callawonga, Perlubie, Butler and Chiton Oil discoveries. On initial production test, the Chiton-1 oil well flowed at 2,434 barrels of oil per day.

The Arno Prospect is targeting both the Namur Sandstone oil play proven at the Chiton Oil Field and the Birkhead Channel stratigraphic play. The Birkhead Channel stratigraphic play has been proven at the Wirraway, Growler, Charo and Snatcher Oil discoveries 30-50km north east of the Arno prospect. The Marino-1 well approximately 2km north of Arno encountered oil shows in intra-Birkhead sands in August 2009.

From seismic analysis, the Birkhead Channel belt identified at Marino-1 and targeted with the Arno-1 exploration well is extensive in the locality of the Marino-1/Arno Prospect and if successfully targeted may establish a much larger Birkhead Channel Play Fairway. A number of additional prospect and lead drilling locations have already been identified as follow-up to exploration success in this Birkhead Channel belt at the Arno Prospect.

The Searcy Prospect is the largest oil prospect in the 5 well exploration program targeting an unrisked recoverable prospective resource potential of as much as 2.2 million barrels of oil within the Birkhead Channel stratigraphic play. The Searcy Prospect is targeting an extensive, and clearly defined Birkhead Channel due east of Marino-1 and due west of the Ballaparudda-1 exploration well which also had significant oil shows in the Birkhead Formation target zone. The Searcy Prospect is a very large feature. If the exploration drilling of the Searcy Prospect is successful, Beach has already identified follow-up drilling locations to further pursue the Birkhead Channel play.

A discovery in any of these prospects would add significantly to Drillsearch's reserves and overall production. All of these prospects are in close proximity to the Chiton Oil Field and because of their close proximity to the existing Chiton infrastructure, any discovery could be commercialized quickly and provide immediate cash flow to the company.

To facilitate the drilling program, Beach has already commenced construction of a new access road from the Callawonga Oil Field into the Chiton Oil Field. This new road is located west of the current flooded access road and is located to avoid potential future flooding. The construction of this road will allow the Chiton Oil Field to return to production in the first week of August.

Site surveys for each of the drilling locations have already been initiated and each of the prospect drilling locations is outside of the flood affected areas. The timing of commencing the 5 well drilling program is subject to Beach securing a suitable drilling rig. It is expected that the drilling program will commence no later than December 2010 /January 2011. As soon as Beach has secured a suitable drilling rig and a definitive schedule has been set for the drilling program, Drillsearch will provide a further announcement on the progress of the program.