The Cooper-Eromanga Basin is located in Central Australia and spans the north-eastern region of South Australia and the south-western region of Queensland. Over the last 40 years since the first gas discovery in 1963, exploration and development activity has focused largely on several core areas leaving much of the Basin very lightly explored.

The Cooper Basin is the most prolific onshore oil and gas-producing basin in Australia. By 1969, gas from the Cooper Basin was being piped 790km to Adelaide. Cooper Basin gas now supplies markets in South Australia, New South Wales, Queensland and Victoria via an extensive pipeline network.

The Cooper-Eromanga Basin has experienced a resurgence in exploration since large areas previously held under long-term tenure were divided and released. The Company holds permits and application areas covering approximately 23,000km²(net), which gives Drillsearch an exceptional opportunity for exploration and development.

The Cooper Basin is entirely covered by the Mesozic Eromanga Basin. It is one of a number of remnant Late Carboniferous to Early Permian depocentres which lay in the Australia interior of the Gondwana Supercontinent. The Cooper Basin differs from these other depocentres by containing an additional sequence which ranges in age from Late Permian to Middle Triassic and spans the Permo-Triassic boundary without a break in deposition. It also differs in being the only Basin with major oil and gas production. The first gas discovery was made at Gidgealpa 2 in 1963 with the first oil discovery at Tirrawarra 1 in 1970.

The Eromanga Basin is composed of sediments of Early Jurassic to Late Cretaceous age which unconformably overlie the older Palaeozoic Cooper Basin. The unconformable relationship between the two basins provides a migration pathway at the Permian sub-crop edge for Permian sourced oils to reach overlying younger reservoirs. The majority of Drillsearch's production is attributed to the Early Jurassic to Late Cretaceous Eromanga Basin sediments which have been sourced from mature organic rich coals and shale source rocks deposited within the Cooper Basin. The first oil discoveries were made in 1978 at Strzelecki in South Australia and Jackson in Queensland. Since then, exploration has encountered oil and gas accumulations from the Permian through to the Cretaceous aged sedimentary rocks.

Drillsearch's sole focus for oil and gas exploration in the Cooper-Eromanga Basin is based on its view that the area is highly-prospective and represents a world-class petroleum setting.

The Company's commitment to exploration and development in the Basin is underpinned by numerous drivers, including:

• The region is a proven oil and gas province which has been a significant provider of Australia's energy needs since the first discovery in 1963.
• The Basin remains significantly underexplored by industry standards. Major advancements in drilling and seismic analysis have been lightly used.
• Exploration success rates in the region are very high, at over 50% following 3D seismic acquisition.
• Drilling costs are low given the basin is located onshore with easy access to equipment and infrastructure.
• Access to infrastructure is excellent, meaning the path to commercialisation for successful discoveries in both short and inexpensive.

The combination of these factors means the economic case for investing capital in exploration and development activities in the Cooper-Eromanga Basin is compelling. On our internal estimates, the payback period on investment spend is less than 1 year.