QUARTERLY EXPLORATION REPORT FOR THE PERIOD ENDED 31 DECEMBER...

QUARTERLY EXPLORATION REPORT FOR THE PERIOD ENDED 31 DECEMBER 2007

Highlights
Essential Petroleum Resources Limited (“Essential Petroleum”;) successfully completed a $10 million capital raising to pursue opportunities in the Otway Basin in southeast Australia. As at 31 December 2007, the Company’s cash reserves were $9.2 million.

Site preparation for a drilling program of up to three onshore wells in PEP 168 is advanced. Contractor, Australian Drilling Services is expected to commence the program in late February.

Prospect scale mapping of 3D seismic survey, has elevated several leads to prospect status in PEP 168 providing follow-up potential.

An application for approval to acquire up to 100 km of 2D seismic data in PEP 151 has been submitted to the Victorian Department of Primary Industries. The survey will be undertaken by contractor Terrex Seismic and is expected to commence late February 2008.

Preliminary work on the lead up to an Extended Production Test (EPT) of the Killanoola oil accumulation in PRL 13 has been undertaken. The EPT is planned to take place in the current quarter.

Processing of the Bernoulli 3D seismic survey in VIC/P46 was completed in December 2007. Data quality is very good and interpretation is now underway.

Seabed coring to investigate the substrate at the proposed Bernoulli and Fermat well locations in VIC/P46 has been completed.

Planning for a 3D seismic survey over the Oliphant and Euclid leads in VIC/P50 is advanced. The survey will be undertaken by PGS using the Pacific Explorer 3D seismic vessel and is scheduled to commence in April 2008.