ATP 259P - Queensland Cooper Basin

Drillsearch 2%

The Naccowlah Block and its associated production licences (PL), which are located in the Cooper Basin of south-west Queensland, cover an area of 3111 km² (768,740 acres) and contain 22 commercial oilfields. Production in the Block has mainly been from the Late Cretaceous Murta Formation, the Jurassic Birkhead Formation and Hutton Sandstone.The majority of the Block is covered by several 3D seismic surveys including the recently acquired Jackson Naccowlah 3D and the Watson 3D.

Drillsearch has a 2% interest in the Naccowlah Block and associated PL’s. This Block contributes an average monthly production of approximately 1,150 bbls and Drillsearch’s 2P reserves in the block at year end 2007 were 282,998 bbls. There is considerable undeveloped potential in the Block, both for near field exploration and additional development on existing fields. In March 2007 development, appraisal and near field exploration drilling began in the Naccowlah Block. Since that time 37 wells have been drilled with significant results occurring at Jackson South, Gunna and Naccowlah West.span>Results of this drilling campaign, as of August 2008, are listed in the table below:

C&S – cased and suspended awaiting completion

P&A– plugged and abandoned

Currently development drilling continues in the Block with an expected 12 wells to be drilled in 2008. These wells will have strong focus on development opportunities but will include 1 delineation well and 1 exploration well. Additional 3D seismic acquisition is expected to commence in late 2008 and early 2009.