south belridge hits oil again

Orchard Petroleum Limited
ABN 25 061 655 463
9 September 2005
Joint ASX and Media Announcement
South Belridge Hits Oil Again and Starts Production from New Facilities
Orchard Petroleum Limited (ASX; OPL) (Orchard) and Orchard Petroleum Inc. (OP Inc), a
wholly owned subsidiary of Orchard, are pleased to announce drilling and production activities
at South Belridge(Sledge Hamar).
Highlights
• The South Belridge #4-7 well has reached total depth of 5,035 feet, has been logged
and completed. An extensive oil and gas accumulation was encountered in the
Diatomite section. In the shallow Etchegoin section, gas was also encountered,
similar to all the wells drilled at South Belridge. In addition, strong oil shows were
also recorded for the first time in the shallow interval.
• The second well, #5-7, in the current six well program commenced drilling at 3:00
am Wednesday 7th September, 2005, Pacific Standard Time. This will be the eighth
well drilled at South Belridge.
• New production facilities are now operational. The new on-site water injection
system is running as planned and dramatically increasing our production capacity
along with lowering operating costs.
• Oil and Gas production has increased to over 200 barrels of oil equivalent per day.
• Production is now targeted to exceed 500 barrels of oil and gas equivalent per day
within the next few months.
OP Inc. has a 25% interest in the South Belridge project and is the Operator. Maxim TEP holds a
75% interest and funds 100% of the first US$ 28 million of development capital for the multiwell
drilling program.
Comments
OP Inc. is quite pleased with the excellent results from the South Belridge #4-7 well. There are
significant hydrocarbons in this well which after undergoing hydraulic fracturing will turn into a
very good producer.
In addition, significant production increases from the new facilities are quite pleasing and on
track for a steady growth in oil and gas sales into the foreseeable future.
Orchard Petroleum Limited
ABN 25 061 655 463
The new six well program will double the number of wells drilled and completed at South
Belridge. A further 10 wells already announced last month and contracted to start early in the
new calendar year will lock in the newly established production momentum.
South Belridge (SB) Drilling
The SB #4-7 well spudded on 21 August 2005 with a planned total depth of 5,000 feet and is part
of an expanded drilling program to develop the Diatomite sections which cover over 800 feet of
hydrocarbons intervals in this area.
The SB #4-7 well reached total depth at 5,035 feet on 3 September 2005. It was logged and 5-
1/2” casing was run to complete the well in order to be readied for an hydraulic fracturing
program planned for early next month.
The SB #4-7 well encountered strong oil and gas shows across the Diatomite sections including
an Olig Potter oil bearing sand close to total depth. In addition, strong gas shows were also
encountered in the shallow Etchegoin interval around 1,650 feet to 1,800 feet. These shallow gas
shows were consistent with what has been experienced in all the other wells drilled at South
Belridge. However, in this instance, strong oil shows were also encountered and will be further
examined for future development.
The SB #5-7 well spudded at 3:00 am on 7 September 2005 Pacific Standard Time with a
planned total depth of 5,000 feet and is the second well in a six well program to develop the
Diatomite sections as well as examine and test the shallow Etchegoin intervals.
These back-to-back wells will be drilled, completed and prepared for stimulation as early as next
month. Stimulation will be done by hydraulic fracturing in multiple stages over each Diatomite
intervals.
OP Inc. has designed a new fracturing program specific to the formations in this area and has
already successfully tested and completed the new approach in a multi-staged fracturing
program.
The final well in this six well program will test the shallow gas sections encountered in each of
the previous wells drilled. Depending on the results of this well, a separate gas development
program will be examined along with a separate oil development program.
OP Inc. has already contracted a drilling rig for a 10 well drilling program to start in the new
calendar year. This new drilling program will focus on the continued development of the
Diatomite and Olig Potter discoveries to date.
Orchard Petroleum Limited
ABN 25 061 655 463
Production
The centralisation of plant equipment at South Belridge has allowed OP Inc. to organise the
individual wells into a production group for the first time and install the necessary pipes and
equipment to prepare for gas sales.
The establishment of our own in-field water injector system has ended the bottleneck in
production and substantially reduced operating costs. The SB #2-7 well is now being used for
water injection and will handle a substantial volume of water from the existing wells. Additional
injector wells will be added as required.
The chart below shows the increase in daily oil and gas production from South Belridge over the
last two weeks. The new production facilities began operations at the beginning of September
and have allowed production to increase to over 200 barrels of oil equivalent per day.
Our target production rate over the next few months is 500 barrels of oil equivalent per day and
is expected to continue to increase along with further drilling and stimulations programs.
Orchard Petroleum: South Belridge Total
Production Rates
0
50
100
150
200
250
8/20/2005 8/22/2005 8/24/2005 8/26/2005 8/28/2005 8/30/2005 9/1/2005 9/3/2005 9/5/2005
Days
BOEPD
For further information please contact Mr Steve Graves on 0011 1805 469 4656.
The geological information included in this announcement is based on information
provided by Mr Edward Duncan, a qualified geologist employed as a technical consultant
to the Company. Mr Duncan has practiced as a geologist in the petroleum industry for
over 20 years. Mr Duncan has consented to the inclusion of the geological information in
this announcement in the form and context in which it appears.