The Koyustu-1 gas exploration well in the Edirne Licence in the Thrace Basin of European Turkey as of 5pm AEST (8am Turkish Time) 2nd January 2007 was drilling ahead at 561m.

The JV is preparing to TD the well, then run and interpret wireline logs in the next 24-48 hours to evaluate intervals that are potentially gas bearing. After interpretation of the logs a decision will be made on whether to test the zones. A release will be made to ASX notifying results of log interpretation and forward plan.

Koyustu-1 will be drilled to a Total Depth of around 600m with the primary target intervals, the Oligocene-Miocene Osmancik sandstones, expected between 350 and 500m.

Following the completion of the Koyustu-1 well, the rig will be moved to the adjacent Bati Umur-1 gas discovery for flow testing of that well. Bati Umur-1 was drilled by the Otto Joint Venture in December 2005 and wireline logging showed several intervals with gas saturations in reservoir quality sandstones.

The Edirne Licence Joint Venture comprises Otto 65%, Incremental 15% and Turkish Operators Merty Energy and Petrako Limited – 10% each.