y2 update

ARC Energy advises that as of 0600 on the 27 March, operations at the Yulleroo 2 well were
preparing to drill ahead to the revised prognosed total depth of 3740 metres. Operations for the
open hole drill stem test (DST) 1 over the primary objective Tournasian gas sands were unable
to be completed because of hole conditions. The decision to attempt a DST was taken after the
equivalent gas sands to those encountered in Yulleroo 1 were intersected and it appeared hole
conditions could be suitable for an open hole DST to be run to determine potential flow rates.
Open hole DST operations require very good hole conditions to be successful and in this case
the operation was abandoned after the DST string became temporarily stuck in the hole.
The well will now be drilled ahead to the secondary objectives of the Laurel Limestones and the
Famennian Limestone section which is age equivalent to the reefal limestone section
encountered in Stokes Bay 1.
A decision will be made on whether to run a liner to provide a definitive test of the Tournasian
gas sands and any other potential reservoirs that are encountered depending on hole conditions
going forward.