AWE's June quarter oil and gas production was 2.48 million barrels of oil equivalent, down slightly on the previous quarter. The Tui project had another strong quarter producing 1.62 million barrels, with oil sales from Tui reaching 1.63 million barrels for the period.

In the full year to June 2008, AWE reported record total oil and gas production of 9.9 million BOE, 152% above the 2007 production record. AWE’s oil production for the quarter was 1.79 million barrels. In the 12 months to June 2008, oil production rose to 6.9 million barrels.

Quarterly gas production increased slightly to 3.6 Petajoules (“PJ”), up 2% on the previous period. Sales revenue for the quarter was $254 million. At the end of the quarter, AWE retained a cash balance of $339 million. Following the repayment of all corporate debt, the company remains debt free.

OPERATIONS

Tui oil fields: PMP 38158, Taranaki basin (AWE 42.5% and operator)

Production from the Tui oil fields totalled 3.81 million barrels (AWE 1.62 million barrels) in the quarter, averaging approximately 41,800 bopd during the period. Cumulative production to the end of June 2008 was 14.2 million barrels, well above budgeted levels. AWE is budgeting oil production of 9 million barrels from the Tui oil fi elds for the year to June 2009 due to the natural decline of the fields.

AWE's share of Tui oil sales for the quarter was 1.63 million barrels, with the Tui Crude brand now firmly established in the market and enjoying improving margins. The Umuroa floating production system continues to maintain high levels of facility uptime with production operations having continued uninterrupted since commencement of production on July 30, 2007. The Tui joint venture is currently evaluating process facility modifications to optimize oil production.

A review of the Tui fi elds reserves was completed in the June quarter which resulted in 2P reserves being increased to 50.1 million barrels. This growth was largely a result of the better than expected reservoir performance and a 5-year extension of the Umuroa contract.

Additional development and appraisal drilling around the Tui oil fi elds will be conducted in conjunction with the next phase of exploration drilling.

BassGas project: T/L1 & T/RL1, Bass basin, (AWE 30%)

Gross gas production from the Yolla field averaged 55 Terajoules ("TJ") per day, following resumption of full production after the extended maintenance work in the March quarter. AWE's share of production for the quarter was 1.5 Petajoules ("PJ") of gas, 61,000 barrels of condensate and 2,067 tonnes of LPG.

During the quarter, the residual issues with the heat exchanger were rectifi ed and by the end of the period the plant was running at design capacity, with full liquid recovery.

T/18P, Bass basin (AWE 30%)

Further geotechnical reviews of the Trefoil gas field and the Gentoo/Rockhopper prospect have been completed and the joint venture has committed to drill two wells; an exploration well on Rockhopper and the Trefoil-2 appraisal well. A review of conceptual development options is continuing.

Casino gas field: VIC/P 24, Otway basin, (AWE 25%)

Gross gas production from the Casino field averaged 93 TJ per day during the quarter, around contracted levels. AWE's share of production for the quarter was 2.1 PJ of gas and 1,400 barrels of condensate. During the quarter, the Casino field passed the 100 PJ gas production milestone.

Henry gas field: VIC/P 44, Otway basin, (AWE 25%)

Engineering, fabrication and procurement operations for the Henry gas field project continued on schedule in the quarter. The Henry 2 production well follows the Pecten East-1 and Netherby-1 wells. First production is currently planned from the Henry gas fi eld in the fi rst half of 2009.

Exploration: VIC/P 44, Otway basin, (AWE 25%)

A two well exploration program started in the permit in mid-2008. The Pecten East-1 well was drilled to a total measured depth of 1,993 meters. Gas shows were reported in the two main reservoir targets, but were proven to be residual after the assessment of wireline logs and pressure tests.

The Netherby-1 well also started drilling after the end of the quarter with gas shows being reported in the main Waarre A reservoir section. Processing of the Champion South 3D seismic survey, in the western portion of the VIC/P 44 permit, has been completed and interpretation of the survey is in progress.