ASX/MEDIA RELEASE 17 August, 2009 PEP 11 Sydney Basin – Funding and Update Bounty Oil & Gas N.L. (“Bounty”) is pleased to announce important developments towards funding and drilling the Fish Prospect in Petroleum Exploration Permit 11 (“PEP 11”) Sydney Basin. Currently Bounty holds 75% of PEP 11 and is the nominated operator. Day to day operations are however conducted by Advent Energy Pty Limited (“Advent”) a subsidiary of listed MEC Resources Limited (“MEC”) (ASX Code: MMR) Advent has an option to increase its interest in PEP 11 from its current 25% to 85% by funding and drilling the first exploration well in PEP 11 as part of the exploration work commitment required by the terms of PEP 11. Advent carries out day to day operations as Bounty’s designated agent. Bounty will be free carried through the first well but will then be required to contribute 15% towards all further exploration and development. MEC has over recent months made a number of announcements showing material progress towards providing the required strong technical underpinning for a wildcat drill test of the undoubted petroleum potential in PEP 11.The permit covers 8,100 square km of the offshore Sydney Basin. With the required technical groundwork for a drill test substantially completed, MEC has now announced a critical step towards funding the well. MEC has entered a mandate with one of the world’s leading petroleum finance groups; Pareto Group of Norway. Norway has massive offshore gas developments and is the European leader in gas exports. Bounty summarises the steps so far: • Seismic surveys by Bounty in 2004 and highly advanced seismic analysis and other surveys conducted by MEC have proved that gas is being generated and expelled from the Permian age coal and related sequences in the offshore Sydney Basin within PEP 11. • MEC has: �� identified the Fish Prospect, a massive structure containing the gas generating sequences with estimated prospective recoverable gas resources of 9.2 trillion cubic feet (at P10 probability level) (920 million barrels of oil equivalent) and additional gas potential in the Permian –Triassic age sequences totalling 16.3 trillion cubic feet for the permit (including Fish). �� selected a drill location to test the Fish Prospect with a jackup drill rig. �� announced on 29 May 2009 that it had issued tenders for a rig to drill the Fish Prospect. �� announced on 11 August 2009 that in addition to the completion of the well design and testing program for the Fish Prospect it had identified seismic anomalies on adjoining 2 seismic lines indicating the possibility of larger gas accumulations in younger Quaternary aged sediments further east of the Fish Prospect with analogies to the giant Marlim gas field offshore Brazil. �� announced the Pareto Group funding mandate on 14 August 2009. Commenting on PEP 11, Bounty’s CEO, Mr Philip Kelso said: “Bounty sees the funding arrangement announced by MEC as an extremely positive step towards drilling the Fish Prospect in PEP 11.Once the technical basis for testing in the offshore Sydney Basin had been established by MEC they commenced the challenging task of funding. The technical strength of the project presented by MEC has now attracted Pareto Group who have raised US $25 billion for a range of international oil and gas majors in the last 3 years. This step by MEC provides confidence that funding and drilling of PEP 11 will now proceed. If the Fish well is successful in discovering commercial gas offshore from New South Wales there is the potential for a major re-ordering of the New South Wales gas market and for establishment of an LNG export project based in the Port of Newcastle simply because the gas volumes would be much larger than could be utilised in the State which currently consumes 890 bcf per annum. Such a development of clean burning gas would also have the potential to supply energy for power generation in the Hunter region. Bounty looks forward to progress towards completion of MEC’s funding for the well” For further information, please contact: Graham Reveleigh Chairman Telephone: (07) 4033.1805 Email: [email protected] Philip F. Kelso Chief Executive Officer Telephone: (02) 9299.7200 Email: [email protected] Corporate Advisor: Anton Rosenberg Claymore Capital Tel: +612 9233 2063 Email: [email protected] About Bounty Oil and Gas NL Bounty is an Australian ASX listed oil producer and explorer. Its core petroleum production and exploration assets are located in the Cooper/Eromanga Basins in South Australia and Queensland and in the Surat Basin. Bounty’s growth assets are spread over a number of high impact projects in Australia and Tanzania where it is exploring for oil and gas. In Australia, it is a participant in PEP 11, Sydney Basin, with up to 16 trillion cubic feet (Tcf) gas potential and in other permits. In Tanzania it is a participant in the recent Kiliwani North gas discovery and is exploring additional gas pools with up to 1Tcf potential. Bounty has reserves approaching 3 million barrels of oil equivalent. [Information in this release that relates to or refers to petroleum or hydrocarbon reserves or resources is based on information compiled by Mr Philip F Kelso the CEO of Bounty Oil & Gas NL. Mr Kelso is a Bachelor of Science (Geology) and has practised geology and petroleum geology for in excess of 20 years. He is a member of the Petroleum Exploration Society of Australia and a Member of the Australasian Institute of Mining and Metallurgy. He has consented to the reporting of that information in the form and context in which it appears in this release.]
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