yulleroo 02 appraisal well, page-2

Resources for this structure are large to say the least as per the extract below from WA Oil and Gas Review. My main concern is that we end up with another ambiguous result as they will no doubt hit gas, but may then decide that they need to design a horizontal production test or a frac test etc. I do believe that they will be successful in the Canning in the end, but it probably won't be proven overnight. But who knows- if they hit some good porosity/permeability updip, may flow on the first well in this area, and given the high liquids content, we would finally see the end of sub $2 Arq. And folloow up potential looks good so success here would excite the market.

And there are certainly other good things happening in 2008 inlcuding the earlier than expected appraisal and exploration offshore Perth Basin.

The Yulleroo wet gas discovery was made in 1967 by German company Gewerkschaft Etwerath. Yutteroo occurs in EPA36 at the crest of the Yulleroo antictine, 70 km east of Broome. Extensive coring in this well identified 700 m of excellent seal,50 m of wet gas-pay in a fairly poor reservoir and around
1200 m of underlying source rock in the form of deep water marine shales with 4.5 per cent total organic carbon content and a large inferred aereal extent. In addition, more recent seismic data has shown Yulleroo-1 to be some 500 m down dip from the structural crest. The reservoir appears to be delta
sand which improves in quality in the up-dip direction to the east and there are nine similar prospects within the permit.

The structure has the potential to contain over 1 Tcf of gas and 100 MMbbl of condensate. Also, there are eight similar structures in the vicinity. In addition to the Yulleroo anticline, these structures have the potential to contain in-place resources of several trillion cubic feet of gas and a considerable amount of petroleum liquids. Three of these structures have burial histories which suggest that they are more likely to host light oil rather than wet gas.