Mosaic Oil NL has signed a drilling contract with MB Century Resources for their Rig#7 to drill up to 6 wells in the Surat-Bowen Basin, Queensland.

Key Points: • Drilling contract signed with MB Century Resources • 2009 calendar year drill campaign to be divided into two programs • Rig mobilisation for first program to commence this week for late April spud • Wells will primarily target probable and possible reserves in existing fields

The drilling campaign in the 2009 calendar year will be divided into two programs.

The first program will comprise four wells. These include two low to medium risk, liquids rich gas and oil development wells at the Taylor Field following the success at Taylor-18 & Taylor-19 in 2008, and one infill gas/condensate development at the Churchie Field for increasing production output from the discovered probable reserves.

Waggamba-5H will be worked over to clean out the interpreted blockage in the horizontal section which has adversely affected the well production performance. Interpretation of cuttings, hydrocarbon shows and logs recorded while drilling has suggested that this well should perform similarly to Waggamba-4H.

The second program is scheduled to commence later in the year following the seismic acquisition and re-processing programs in the first half of 2009 calendar year. This second drilling program will comprise at least one additional gas and oil development well at Taylor as well as a farm-in oil exploration well in ATP 608P (Stratton Block). This well is subject to the positive interpretation of a 2D seismic program currently being acquired by Mosaic Oil. Additional wells may be added to the second program based on ongoing technical work and commercial evaluation.

The first drilling program is expected to commence within the next two weeks with the drilling of the Churchie-11 gas/condensate appraisal well in the Churchie Field. This will be followed by a workover of Waggamba 05H and the drilling of two wells in the Taylor field.

Churchie-11 was planned as part of the Mosaic Oil operated 2008 drilling program, but was not approved for drilling by the Churchie Joint Venture. The well will now be drilled immediately following Mosaic’s recently announced acquisition of the Santos interest thereby achieving 100% ownership of the Churchie Field.

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