Ann: Phoenix South-3 Drilling Update, page-3

Progress The well has completed the wireline evaluation program through the Caley Member. Hydrocarbons were observed from around 5,173 metres Measured Depth (“MD”) down to the lowest closing contour at around 5,304 metres MD within the Caley interval. This range indicates a significant gross column of hydrocarbons of 131 metres were encountered in the well. Since the well was targeting the Caley Member some 80 metres below the crest of the structure there is potential for a larger overall hydrocarbon column. The net reservoir from wireline logging was interpreted by Carnarvon to be around 16 metres with an average porosity of 8%. The sampling program was unable to extract hydrocarbons and hence determine the exact nature of the fluids encountered. The results from wireline logging, including the sampling program, indicate the permeabilities are in the lower end of the range of expectations and evaluation of the reservoir core samples extracted are required to determine if the reservoir is capable of flowing at commercial rates. Analysis of these cores are expected to take a number of months as will the assessment of any contingent resources. Current Operations The rig is in the process of finalising well operations and following which the drilling rig will be released. Project equity Owners (WA-435-P):