Victoria Petroleum N.L. (Vicpet) as operator for the Mirage and Ventura oil fields, PPL 213/PPL 214 advised previously that oil production has been suspended at the Mirage and Ventura oil fields since February 2010 due to abnormally high rains that have seen large parts of the Cooper Basin under water for several months. The flood waters in the southern part of the Cooper Basin have receded and repairs to the Santos roads and the road into the Mirage Oil Field Central Production facility have been completed allowing the movement of oil road tankers to Moomba.

This has resulted in the recommencement of oil production from the Mirage and Ventura oil fields at a rate of 85 barrels of oil per day.

For the other Vicpet operated oil fields in the SA Cooper Basin - Growler and Snatcher, a recent aerial inspection of the floodwaters in and around the Growler and Snatcher oil fields indicate that although the flood water levels are declining, the road from Growler to Moomba and Snatcher to Moomba is not anticipated to re-open until November 2010. The shut-in of the Growler and Snatcher oil fields will continue until the Santos roads are re-opened when road tanker oil deliveries to Moomba will resume.

The increase in time of deferment of production is disappointing, and will impact on the projected FY 2011 net production revenue of Vicpet for its 60% of production reducing it to an estimated $12.1 million. This reduction in net revenue for FY 2011 arises not only from the shut in of existing producing wells, but also the delay in the implementation of the development drilling program.

The shut in status of the Santos roads to Growler and Snatcher will also result in a delay to the start up of the exploration drilling on the 25 Birkhead Sandstone drill targets defined by the 2009 Mollichuta 3D seismic survey in PEL 104/PRL15 and PEL 111. An unrisked gross potential recoverable oil reserve of up to 40 million barrels is interpreted for these drill targets, oil productive at the Growler and Snatcher oil fields, if oil is present.

These drill targets are being prioritised for order of drilling according to their proximity to the known oil occurrences and production within the Western Margin Oil Project and ease of access by the drilling rigs once the flood waters recede.

In order to make up for lost development and exploration drilling time due to the current flood event throughout the Western Margin Oil Project permits, Vicpet plans to resume its drilling program of up to ten wells through 4Q 2010 and into the 1H 2011 starting in November 2010 by using two drilling rigs.

One of these rigs will be the Century#3 drilling rig stacked at the Growler Oil Field and upon the roads reopening will commence a continuous development and exploration drilling program of up to six wells based on the recently acquired 3D seismic in the Growler Oil Field and the area containing the surrounding Wirraway, Warhawk and Tigercat oil discoveries. The other rig is planned to be used for development drilling in the Snatcher Oil Field and exploration drilling of the 3D seismically defined Mustang, Tomcat and Sabre prospects.

Tags: Victoria Petroleum N.L.