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Summary

Cooper Basin Oil Discovery in Suspended Wells: Kudrieke 2 and Mitchie 1

Santos Ltd, as Operator, on behalf of the PPL 118 and 119 Joint Ventures, announces the discovery of a new oil pool in the South Australian sector of the Cooper Basin.

Production testing of the suspended gas well Kudrieke 2 (drilled in 1988) over the Tirrawarra sandstone produced 55 degree API oil through a test separator at an average rate of 260 barrels of oil per day.

Production testing of the Tirrawarra sandstone in the suspended well Mitchie 1 (drilled in 1982), 3 km north of Kudrieke 2 on the northern extension of the Kudrieke-Mitchie structure, produced 57 degree API oil through a test separator at an average rate of 223 barrels of oil per day.

Santos Managing Director Mr John Ellice-Flint said, “The dedicated focus on optimising and re-evaluating our assets has got off to a good start, with a success rate to date of four out of four from previously suspended wells, with two further wells currently cleaning up. The nearby suspended gas well Lake MacMillan 1 was also connected in September and is flowing at an average of 3.5 million cubic feet per day.”

Kudrieke 2 is located 77Km North of the Moomba plant and 10Km North of Moorari, the most northerly oil discovery in the Tirrawarra formation prior to the Kudrieke-Mitchie results.

An extended production test will be carried out in Kudrieke 2 to assist in optimising recovery from this oil pool. Planning will consider the option of a gas flood to optimise recovery, as successfully carried out in the Tirrawarra and Moorari fields to the south of Kudrieke-Mitchie.

In addition to the oil potential in this field, the gas-bearing Toolachee formation in Mitchie 1 will be tested in order to appraise an extension of the Toolachee gas pool at Kudrieke 2.

The interest holders in PPL 119 are:

Santos Group (Operator)

59.75%

Delhi Petroleum

20.21%

Origin Energy

13.19%

Novus Australia Resources

4.75%

Basin Oil

2.10%