test of lowest zone of interest in yowlumne st-1 w

Hi All,

SALINAS ENERGY LIMITED announcement - Test of lowest zone of interest in Yowlumne ST-1 Well starts

Remember that NEO On 21 December 2005 announced that it had acquired a significant shareholding in the TSX Venture NEX Exchange listed Statesman Resources Ltd (“Statesman”). The acquisition of these shares resulted in Nuenco owning 19.9% of Statesman which is presently in the process of drilling the North Yowlumne-1 well in the San Joaquin Basin.

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See post at:
http://www.share scene.com/index.php?act=ST&f=16&t=2562&hl=&view=findpost&p=270659

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Salinas Energy Limited

ANNOUNCEMENT TO THE AUSTRALIAN STOCK EXCHANGE: 23 MARCH 2006

Test of lowest zone of interest in Yowlumne ST-1 Well has commenced

Salinas Energy Limited advises that the flow test of the lowest zone of interest in the
North Yowlumne ST-1 well has commenced and that the planned intervals between
12,860 feet and 13,020 feet have been perforated.

Because of the test procedure that is being used for this relatively deep zone it may take
a number of days before sufficient qualitative information is available with which to make
an assessment of the hydrocarbon potential of the zone.

Salinas intends to make further announcements on the progress of the test program as
and when there is sufficient information to make valid assessments of the significance of
the results.

A decision to test the well was taken after acquiring a suite of electric logs which was
limited by difficult hole conditions. The electric logs indicate that a thick sequence of
sandstone units is present within the target interval exhibiting porosity and characterised
by high resistivities on the logs, indicative of the presence of hydrocarbons.

Up to three separate zones will be tested for flow potential and hydrocarbon content,
beginning with the lowermost zone.

In the event that the test program results in the well being completed for commercial
production, Salinas will derive 50.0% of revenue from the well (less applicable royalties
and costs) until payout.

The well is testing a large oil prospect on the South Buena Vista lease area (in the San
Joaquin Basin in California) in which Salinas Energy is earning 25.0%. The prospect has
potential for a resource of over 100 million barrels of recoverable oil and is immediately
adjacent to the 113 million barrel Yowlumne oil field.

Drilling of the prospect is consistent with the Company's exploration strategy to focus on
strong flow rate reservoir targets in prospects with substantial oil reserves potential.
Salinas is funding 50% of the cost of the well to earn its 25% interest. Partners in the
South Buena Vista project are (after payout):

- NEG (Operator of the initial exploration well) 6.25%
- Ivanhoe Energy 56.25%
- Salinas Energy 25.0%
- Statesman Exploration 12.5% = NEO has 19.9% of Statesman...

Enquiries- Managing Director: John Begg
Contact Details: Telephone: 08 9322 6322
Facsimile: 08 9322 6558



Announced by: NEO
Announced on: 14/03/2006
LETTER TO SHAREHOLDERS
Section announcement
QUOTE


• Potential Oil discovery by Statesman: Nuenco owns 19.9% of a Canadian listed Statesman
Resources (“Statesman”) which is testing a well in California in a prospect that has the potential to
contain 100 million barrels of recoverable oil. Statesman has a 12.5% interest in the prospect and
its shares have risen as high as CAD$2.90 in recent times – they are currently trading at CAD$2.10.
Nuenco’s average price for it’s stake in this company was less than CAD$2.00 per share largely paid
for by the issue of Nuenco shares at a price of A$0.04 cents per share.//


North Yowlumne:

On 21 December 2005 Nuenco announced that it had acquired a significant shareholding in the TSX
Venture NEX Exchange listed Statesman Resources Ltd (“Statesman”). The acquisition of these
shares resulted in Nuenco owning 19.9% of Statesman which is presently in the process of drilling
the North Yowlumne-1 well in the San Joaquin Basin with partners Ivanhoe Energy (USA) Inc
(56.25% working interest), Salinas Energy Limited (25% working interest), Nahabedian Exploration
Group (‘NEG”) (6.25% working interest).

The target of this well is a large Stevens Sand reservoir (covered by 3D) with the potential to contain
100 million barrels of recoverable oil with interpreted links to the adjacent 113 million barrel
Yowlumne Oil Field – an outstanding field where production wells have flowed at rates in excess of
2,000 barrels of oil per day (bopd) and yielded up to 4 million barrels of reserves per well. By
funding 25% of the cost of drilling the current well, Statesman will earn a 12.5% working interest in
approximately 6,000 acres of leases in and around this prospect.

The North Yowlumne well has now reached target depth and has been cased for testing in the near
future. The investment gives Nuenco material exposure to a successful well and/or the development
of this prospect. If 100 million barrels or even a portion of that is discovered at North Yowlumne, this
would be a major discovery.

This investment through Statesman gives Nuenco material exposure to success with the well and/or
the development of this prospect and with an average entry price below CAD$2.00 per share
(Statesman has approximately 3,000,000 shares on issue and last traded at CAD$2.10 per share)
the Company believes it is well placed for this upside. Nuenco started acquiring Statesman shares
on market at under CAD$0.50 cents per share and then by way of a share exchange based on a
market value of CAD$2.20 per Statesman share and AU$0.04 per Nuenco share. At this stage the
company has acquired 19.9% of the shares issued by Statesman Exploration.