Ann: MEO acquires 30% equity in South Madura PSC , page-10

re: Ann: MEO acquires 30% equity in South Mad... Kurnia-1 - End of Well and Well Summary

Additional Information
Observations/Measurements
The facts pertaining to the well are:

? The pre-drill objectives for Kurnia-1 were to drill a well to evaluate the Ngrayong sandstone formation and the Kujung carbonate formation for the presence of commercial hydrocarbons.

? The well was designed primarily to enable the Joint Venture to reach total depth. Since Kurnia-1 was the first well in the area to be drilled to the proposed total depth, the well casing program was designed to manage the uncertain nature of the formation integrity and formation
pressures at the well location.

? The Ngrayong sandstone formation was encountered close to prognosis from 1,262-1,264 and 1,292-1,300 metres and a Tuban sandstone formation was encountered at 1,785-1,790 metres. Elevated oil and gas readings were recorded over these intervals.

? The Kujung II Carbonate formation was encountered close to prognosis from 2,998-3,326 metres. Elevated oil and gas readings were recorded over this interval.

? The well successfully and safely reached a total depth of 3,350 metres. Elevated gas readings persisted in the well to total depth.

? Open-hole production testing of the Kujung carbonate was undertaken and the well was unloading strongly with good flowing wellhead pressures. Early in the test flammable gas was detected and flared at surface. Unfortunately the test had to be stopped prematurely due to debris plugging the production tubing.

? As the well has large number of casing strings in the upper section and therefore a small hole size at total depth, the Joint Venture was limited as to the alternative completion options that were available at total depth and, as the formation had become unstable (demonstrated by the
plugging of the tubing during production testing and observations whilst cleaning out the hole), the Joint Venture decided not to risk any further production testing activities in the well.

Interpretation
Cooper Energy?s interpretation of the well data is:

? Log evaluation of the Ngrayong and Tuban sandstone formations indicates that the formations are tight and potentially non-productive. No further testing was proposed for the Ngrayong or Tuban sandstone formations.

? Log evaluation of the Kujung Carbonate indicated that the total thickness of the formation is 352 metres with 206 metres of clean carbonate. There appears to be three distinct zones in the formation: 2,998-3,064 metres is a mix of shale and carbonate (~40% net to gross), 3,064-3,200 metres is mainly clean carbonate (~85% net to gross) and 3,200-3,350 metres is a mix of shale and carbonate (~50% net to gross).

? An image log run over the Kujung section demonstrates that fractures are present in the carbonates and shales, which is encouraging as fractures are usually required to ensure sustained production in carbonates.

? The well test data indicates that the reservoir pressure is approximately 8,600 psia. This level of pressure was at the high end of pre-drill expectation and may indicate a long gas column. The interpretation of a long gas column is supported by the elevated gas shows that commenced at
2,998 metres and continued to the total depth of 3,350 metres. The interpreted spill point of the structure is at 3,500 metres, which could potentially lead to the demonstration of a 500 metre hydrocarbon column.

? Cooper Energy considers Kurnia to be a possible gas discovery, which is supported by the elevated gas readings measured whilst drilling and the limited production data.

? The Kurnia structure has an estimated areal closure of 100 km2 and a vertical relief of 500 metres. As per previous announcements, the pre-drill estimates of recoverable gas ranges from 680 (P90) to 3,800 (P10) billion cubic feet. The Joint Venture will now integrate all the data from the well into the existing dataset and seek to revise these volumes.

? At this time Cooper Energy has insufficient data to comment on the commerciality or non-commerciality of the Kurnia discovery. Further technical and appraisal work is required to define the potential recoverable volumes and commerciality of the discovery. A high level overview of this work was provided in the main body of this release.

http://www.cooperenergy.com.au/cooper-pdf/COE110208a%20Kurnia-1%20End%20of%20Well%20Summary.pdf