Petsec Energy Ltd today announced that the Mobile Bay 951 #1 well has reached target depth and discovered gas. Petsec said the Mobile Bay 951 #1 well had reached total depth on October 20 2006 and encountered 5.5 metres (18 feet) of net gas pay.

The well is being cased and will be suspended for future completion and tie-in to production facilities.

The second well in the 3 well programme will be drilled in the adjoining lease at Mobile Bay 950 and is expected to spud in 6-8 days, with a reserve target of 4-8 Bcfe.

It is expected that successful wells can be brought into production as early as four months from the completion of this drilling programme.

Details of the successful well are as follows:-

Well Name:

Mobile Bay 951 #1

Spud Date:

16 October 2006

Water Depth:

20 metres (67 feet)

Total Depth:

930 metres (3,050 feet) measured depth

Operator:

Petsec working interest:

Petsec net revenue interest:

Royal Exploration Company Inc.

50.00% before payout (40% after payout)

39.42% before payout (30.53% after payout

This is the first well to be drilled on the portfolio of 33 leases acquired by Petsec in August, which has unrisked targets of 157 Bcfe of gas and 28 million barrels of oil net to the company.