PEL 104

Cooper Basin JV, South Australia

(40% Working Interest)

PEL 104 is located on the Western Margin of the Cooper Basin and covers 1,069 square kilometres and forms part of the Western Margin Oil Fairway that the Joint Venture has been appraising over the past year.  This has resulted in the discovery of oil at Growler and Wirraway. The permit is located immediately adjacent to the Tirrawarra Oil field, Australia’s largest onshore oil field with estimated reserves of 70 million bbls and 340 billion cubic feet of gas and the Fly Lake Oil and Gas field.  The permit also surrounds the Callabona oil discovery which recovered 16 barrels of oil from the Birkhead Formation.  The Christies, Sellicks and Callawonga Oil Fields are to the south.

Impress Energy considers the permit highly prospective for both oil in the Jurassic sequences on the Western Margin and gas in the deeper Permian sequences in the central and eastern portions of the permits.

The first drilling by the Joint Venture was conducted in September 2006 with the spudding of Growler-1.  Growler-1 encountered an 18 metre oil column in the Lower Birkhead formation and on drill stem test flowed 36 barrels of 49 degree API oil over a two hour flow period and was completed as a future oil producer.  A second well, Wirraway-1 was spudded in April 2007 following a long delay due to rain and floods.  Wirraway-1 is 4 kilometres northwest of Growler-1 and encountered an 18 metre oil column in the Lower Birkhead formation and was also completed as a future oil producer.  The Growler-2 appraisal well was spudded in May 2007, 750 metres north of Growler-1.  Following further weather delays and rig problems the well encountered a 15 metre oil column in the Lower Birkhead reservoir.  The well was completed as an oil producer and both it and Growler-1 will be incorporated into the Growler Extended Production Test scheduled for the fourth quarter of 2007.  Work on obtaining government approvals and facilities design is underway, and major equipment items like pumps and tanks have been procured by the Joint Venture.

In August 2007 a farm out Letter Agreement was signed with Advent Energy Limited.  Under the terms of this Advent Energy has the opportunity to gain 50% of the Typhoon Block in PEL 104, containing the Typhoon, and Tempest prospects, in exchange for fully funding the drilling of two exploration wells.  The block covers the central portion of the permit and contains Permian aged sediments prospective for oil and gas.