Australian oil and gas producer, Mosaic Oil NL has furthered the Company's strategy to increase its involvement in new exploration opportunities by advancing several New Zealand initiatives.

Highlights • Mosaic to acquire a 10% interest in PEP 51149 under an agreement with Todd Exploration Limited • The Alton 2D seismic survey completed in PEP 51151 • Mosaic is participating in an application for near-shore permit over the large Kaheru structure (PEP 52181; Mosaic interest 15%).

Mosaic has concentrated on acquiring New Zealand acreage within the Taranaki Basin, which has an established gas market and a well-developed infrastructure. Taranaki is New Zealand's sole oil and gas producing basin with an expected ultimate recovery (EUR) from existing fields and discoveries under development of approximately 7 trillion cubic feet (TCF) of gas and more than half a billion barrels of oil and condensate.

Mosaic's exploration focus is in two well-defined prospective trends in the onshore/ near-shore Taranaki Basin: the Eocene coastal reservoir fairway and the Eastern Margin trend.

Mosaic has now firmed up the second of three named projects with the execution of the farm-in to PEP 51149, complementing its existing interest in PEP 51151 and its application for the Kaheru block (PEP 52181).

Currently in the seismic acquisition and geological and geophysical phase, the three projects will ultimately result in a drilling program of up to five exploration wells in 2011-2012 targeting both oil and gas-condensate, including some with sizeable potential. This program will give the Company exposure to several plays with differing risk profiles in prospects on established Taranaki hydrocarbon-producing trends. The drilling is expected to be funded from increases in production from the Company's Queensland assets over the next couple of years.

Mosaic's CEO Mr. Alex Parks said: 'Mosaic is maturing a portfolio in New Zealand that will result in an affordable yet material drilling program, giving Mosaic and our shareholders the potential of major discoveries in a region that is highly prospective for oil and gas.'

Mr. Parks also confirmed that Mosaic will continue to evaluate other opportunities in the Taranaki Basin, both onshore and offshore.

Tags: Mosaic Oil NL