AWE reports that the Netherby-1 well started drilling on July 15, 2008. As of today, the rig was setting surface conductor at a measured depth of 131 meters.

The Netherby-1 well is designed to test the Waarre "A" Sandstone and will be drilled to a planned total depth of 1,823 meters. Netherby-1 is located in VIC/P 44, approximately 4 kilometers north of the Henry-1 gas discovery.

Previously, the Pecten East-1 well was plugged and abandoned at a total measured depth of 1,993 meters. Gas shows encountered in the well were evaluated by logs and pressure testing and were proven to be residual.

Netherby-1 is the second well in the current drilling program, which will target additional gas reserves in the offshore Otway Basin. In case of success at the Netherby-1 exploration location, the VIC/P 44 joint venture has included provisions to drill an immediate follow-up sidetrack development well. The Henry-2 development well will follow immediately after Netherby-1/Netherby development well/s.

Participants in VIC/P 44 are AWE with 25.0%, Santos Limited (Operator) with 50.0% and Mitsui E&P Australia Pty Ltd with 25.0%.