Drillsearch has engaged Gaffney, Cline & Associates Pty Ltd (GCA) to conduct the Company’s independent assessment of reserves and resources. GCA assesses all of the Company’s reserve and resources in accordance with the Society of Petroleum Engineers Petroleum Resource Management System (“PRMS Guidelines”). GCA reviews the Company’s discoveries to determine whether it considers that they are sufficiently near commercial development to be classified as reserves under the PRMS Guidelines.

GCA is currently reviewing the Company’s reserves and resources following the completion of the PEL 91 five well exploration program. This Audit will review all of the PEL 91 oils discoveries, Hanson-1, Snellings-1, Arno-1 and Bauer-1. Once each of these discovery wells are completed and initial production tested. This is expected to be completed by calendar year-end 2011.

In May 2011 Drillsearch announced that Brownlow, Canunda, Middleton and Udacha Wet Gas discoveries in PEL 106B are commercial and justified for development and as such can be reclassified from Contingent Resources to Reserves.  GCA has estimated these Wet Gas discoveries contain Gross 2P Reserves of 13.92MMboe. Drillsearch’s share of these discoveries is approximately 7.62MMboe, of which 3.11MMboe are liquid hydrocarbons (condensate and LPG).

Work is also underway on PEL 106A to mature the Contingent Resources into Reserves.

In July 2011 Drillsearch formed a $130m strategic Joint Venture with QGC to explore and develop unconventional shale and tight gas resources in ATP 940 in the Cooper Basin. Drillsearch hopes to add significant 2P reserves to its books through further exploration and develop of this permit and other unconventional projects.