Drillsearch has confirmed a major increase in the Company's Cooper Basin 2P/2C oil and gas Reserves and Contingent Resources. These upgrades in 2C Contingent Resources were confirmed by results of the Annual Reserves & Resources Audit Review conducted by independent experts, Gaffney, Cline & Associates Pty Ltd (GCA).

Drillsearch Managing Director Brad Lingo said the Company is extremely happy with the Annual Reserves & Resources Review with GCA and its' results indicate an opportunity to generate significant shareholder value as we work toward proving up our wet gas resources in the Western Cooper.

"We view the results of the independent review as an independent validation of our effort over the last year," Mr. Lingo said.

"This assessment gives us confidence to lock in significant gas sale arrangements and to commit to significant development expenditures," he said.

"Following this extensive and extremely thorough review, we have a great deal of confidence in moving forward to develop the Wet Gas Discoveries in the Western Cooper."

"The independent review clearly determined that the Western Cooper Gas & Liquids Project has a major resource base that supports a significant development project."

"The wet gas discoveries in the Western Cooper are very liquids rich and for every million standard cubic feet (Mmscf) of raw gas we can produce about 40 barrels of hydrocarbon liquids."

"If Drillsearch produced these wet gas resources at a rate of 25 Mmscf per day on a 100% basis we could generate net operating income from liquids sales of over $16 million per annum. With the Contingent Resource we have now established this is certainly within our reach."

"Our internal estimates give us substantial additional room to further increase the resource estimates signed off on by GCA."

"We are looking to undertake significant additional appraisal and development drilling over the next year to prove up and commercialise these resources."

"We see this entire process as a clear indication of Drillsearch's commitment to providing the investment community with high quality and transparent insight into the very things that underpin the value of the company – our Reserves and Resources."

"It is important to note that the decline in our 2P Reserves is simply a reflection of the continued production from the Tintaburra Block joint venture (JV), our divestment of the Naccowlah Block 2% JV interest and the impending sale our Canadian operations – both of which we consider non-core.

"With the Chiton Oil Field coming online and the imminent 5-well exploration program in the Western Flank Oil Fairway we are quite optimistic about offsetting any decline."

Tags: Drillsearch Energy