The Directors of Mosaic Oil N.L. (MOS) has accepted a farmin offer from Avery, a wholly owned subsidiary of Avery Resources Inc. from Calgary, Alberta, Canada.

The total estimated expenditure to be funded by Avery for the program is over $5 million within 12 months after the execution date of the Farmin Agreement.

Avery has agreed to drill two wells in ATP 709P (Part 5) and to acquire 80-100 sq. km. of 3D seismic data to earn a 50% working interest in ATP 709P (Part 5) and an option to participate at a 50% working interest level in drilling two new wells in the Taylor Oil and Gas Field area.

ATP 709P (Part 5) contains the Rockhampton High-1 oil discovery and two oil prospects, the Permian Tinowon Sandstone and Triassic Rewan Formation Freneau Prospect and the Triassic Showgrounds Armstrong Prospect both located east of the Taylor Oil and Gas Field.

Mosaic believes the proposed farmin 3D seismic data acquisition program will significantly reduce the appraisal/development risk of future Taylor area wells.

The Taylor Oil and Gas Field has produced over 16 BCF (billion cubic feet) of gas and 1.8 MMBbl (million barrels) of oil/condensate from the Triassic Showgrounds Sandstone. The remaining upside potential (3P) of over 8 BCF of gas and 1 MMBbl of oil/condensate requires additional wells to confirm and produce.