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Here it is


June 2008
Manager Announcements
Company Announcements Office
Australian Securities Exchange
10th Floor, 20 Bond Street
SYDNEY NSW 2000
Oil Discovery at the Silverthread Project
Highlights
· Solimar Energy announces that the Nesbit #5 exploration well at the Silverthread Project
has encountered approximately 800 feet of potentially oil bearing section in the Saugus
Formation.
· The net hydrocarbon column is approximately 280 feet.
· Further evaluation of the data and production testing is required to determine the size
and commercial significance of this discovery.
· Solimar Energy has secured an 18.5% interest in a further 200 acres (limited down to the
depth of the Saugus Formation) which adjoins the Nesbitt Lease.
Update on the Nesbitt #5 Well
Solimar Energy Limited (“Solimar Energy”) (ASX Code: SGY) is pleased to announce
that the Nesbit #5 exploration well has encountered approximately 800 feet of
potentially oil bearing section in the Saugus Formation. The net hydrocarbon column is
approximately 280 feet.
The Nesbitt #5 well at the Silverthread Project in the Ventura Basin, California reached
the target depth of 7,134 feet at 1830 hours on 31 May 2008 (Pacific Coast Time,
USA). Wireline logs have now been obtained across the Saugus Sandstone reservoir
at around 3,200 to 4,000 feet (measured depth) and the Upper and Lower Mohnian
Sandstone (Monterey Formation) reservoir at around 7,000 feet. Wireline logging
results and initial core examination indicate the Saugus Formation is hydrocarbon
bearing and the Upper and Lower Mohnian Sandstones are non-hydrocarbon bearing.
The Saugus Formation is recognised as an oil producing sandstone in the immediate
area of the Silverthread Project.
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Forward operations will involve casing and completing the upper section of the well
across the Saugus Formation where the discovery has been made and performing
production testing operations. These operations are expected to occur by the end of
June 2008.
At this stage it is too early to make any definitive comments about the size and
commercial significance of this discovery. The potential oil bearing accumulation is
interpreted to be a steeply dipping formation sealed against a fault. An extensive side
wall coring operation, combined with dip meter logging analysis and production testing
over the coming weeks will provide a better indication of the discovery potential. It is
important to understand that this area is very rugged and geologically complicated with
no seismic survey coverage. Exploration is controlled by surface geology, well control
and analogue data.
As a result of the discovery, both Solimar Energy and Sunset Energy have agreed with
the Operator, Mirada Petroleum, to expand the acreage position into the adjoining
lease, with a depth limitation down through the Saugus Formation. In exchange for an
interest in a further 200 acres, Solimar Energy will slightly reduce its equity position
from 20% to 18.5% over the new acreage position. Solimar Energy retains its 20%
interest in the original Nesbitt lease. Subsequent drilling on either lease will be on a
working interest basis with no further promote paid beyond the current well.
The Chairman of Solimar Energy, Mr Frank Petruzzelli, said “Based on our preliminary
assessment to date, it appears that the Nesbit #5 well contains a substantial oil column.
However we are still in the process of evaluating data and conducting production
testing operations. Until such time as these operations are completed it is difficult to
ascertain the commercial significance of this discovery with any degree of certainty. We
are also pleased that we have been able to expand our acreage position in the
Silverthread area via the acquisition of an adjoining lease, where we believe the
potential discovery may extend into this lease area.”
Background to the Silverthread Project
Solimar Energy has a 18.5 to 20% working interest in the Silverthread Project, which is
located in the prolific Ojai oil and gas producing area in the Ventura Basin, about 100
kilometres northwest of Los Angeles, California (refer to Figure 1). This area contains
several producing fields which include Silverthread, Sisar Creek, Lion Mountain,
Sulphur Mountain and Sulphur Crest.
Partners in the Silverthread Project (and their respective working interests) are:
Mirada Petroleum Inc. (Operator) and Partners: 63.0% to 60.0%
Solimar Energy Limited (ASX Code: SGY): 18.5% to 20.0%
Sunset Energy Limited (ASX Code: SEY): 18.5% to 20.0%
Yours sincerely,
Frank Petruzzelli
Chairman
Solimar Energy Limited