Tap Oil Limited provides the following update on the Zola-1 exploration well, offshore Carnarvon Basin, Western Australia.

The Zola-1 well is located in permit WA-290-P, immediately south of the giant Gorgon gas field in the Carnarvon Basin, Western Australia. The well is being drilled in 285 metres of water and the primary Mungaroo Formation target will be intersected at approximately 4,300 metres below sea level. Further secondary targets will see the well drilled to a target depth of 5,000 metres.

Progress During the period from 06:00 hours WST on 16 February 2011 to 06:00 hours WST on 17 February 2011, the well was drilled ahead in 216mm (8½') hole to a depth of 4,277 metres.

Zola-1 is currently drilling ahead in the Mungaroo Formation, the primary target of the well. The well has encountered indications of hydrocarbons suggesting the presence of a gas column from the top of the primary target. At this stage the interpretation is based on data obtained down hole while drilling (mud log and Logging While Drilling (LWD)). The extent and thickness of the gas column will be confirmed when the upper Mungaroo section has been drilled out and wireline logs are run at the appropriate logging point.

Background The Zola prospect is a very large Triassic tilted fault block on trend with the giant Gorgon gas field. One of the largest undrilled structural features in the Carnarvon Basin, Zola is covered by high quality newly reprocessed 3D seismic data and is considered a moderate risk prospect. Zola is estimated by Tap to contain mean recoverable gas volumes of 1.0 trillion cubic feet with upside potential for 2.0 trillion cubic feet. The well will test the gas potential of several top and intra Mungaroo Formation sands - the primary reservoir at Gorgon. In addition it is possible that some Jurassic reservoirs may be developed flanking the main Triassic structure.

Previous drilling in WA-290-P focused on the shallower Jurassic and Cretaceous interval, resulting in the Antiope gas discovery in 2000 and the minor Lauda oil discovery in 2005.

Located close to existing and developing gas infrastructure, Zola would have multiple potential development options should it be a discovery. Any development at Zola could also encompass the overlying Antiope gas discovery (estimated at ~120 Bcf).

WA-290-P Joint Venture Participants Tap (Shelfal) Pty Ltd 10.00% Apache Northwest Pty Ltd (Operator) 30.25% Santos Offshore Pty Ltd 24.75% OMV Australia Pty Ltd 20.00% Nippon Oil Exploration (Dampier) Pty Ltd 15.00%

Tags: Tap Oil Limited