HomeInfratil News2007Austral Pacific Energy Ltd. Announces Memorandum of Understanding (MOU)

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Austral Pacific Energy Ltd. Announces Memorandum of Understanding (MOU)

22 Mar 2007

Austral Pacific Energy Ltd. is pleased to announce that a non binding MOU with Alcan South Pacific has been concluded
with its wholly owned subsidiary Austral Pacific Energy (PNG) Limited.

The MOU sets out the activity to further investigate the supply of approximately 40 billion cubic feet of natural gas per annum over 20 years to the Gove Refinery in the Northern Territory of Australia. This work programme is expected to be completed by mid 2008 and aims to provide sufficient information for the parties to proceed to a binding agreement to supply natural gas to Gove.

Austral Pacific Energy Ltd., through its wholly owned subsidiary Austral Pacific Energy (PNG) Limited, is a joint venture participant in two exploration permits, PPL 235 and PPL 261, in the Western Province of Papua New Guinea.

PPL 235 has two wells, Douglas-1 and Langia-1, which are both gas discoveries with potential condensate. In Langia-1, the discovery consists of a net 7 metres of gas pay in a high quality reservoir. Douglas-1 consists of a net 25 metres of gas pay in two sections with excellent porosity and permeability characteristics. PPL 261 is contiguous with PPL 235.

The PPL 235 joint venture also owns the Coral Sea 1 drilling rig, which has been maintained on site in anticipation of further drilling to build the companies' oil and gas resources.

Austral CEO Rick Webber said, "We are delighted that our enthusiasm for our licenses in Papua New Guinea has been vindicated by the range of potential commercial opportunities that has emerged from the pre-feasibility study conducted in late 2006. Execution of the MOU with Alcan South Pacific establishes a framework for progressing
monetization of the Douglas gas discovery. We now look forward to accelerating our drilling programme with the immediate tasks of flow testing Douglas-1 and drilling appraisal wells on the Douglas gas field and drilling our nearby Puk Puk structure, the drilling here having been substantially de-risked by the success of Douglas. It is anticipated that the proposed drilling programme should be completed by mid 2008."

Austral owns 35% of PPL 235 and 50% of PPL 261.
Web site: www.austral-pacific.com

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