dongara 32 arranoo reservoir appraisal/development

Release Date: 20 December 2004 To: Australian Stock Exchange Ltd No of Pages: 2 From: Eric Streitberg Re: Dongara 32 Arranoo reservoir appraisal/development well spuds ARC Energy Limited advises that drilling of the oil and gas appraisal well Dongara 32, operated by ARC and located in the Dongara Field in onshore Perth Basin Production Licence L2 commenced at 1100 hours on Sunday 19 December 2004 using the Century 11 drilling rig. As at 0600 hours the current operation was drilling 12 ¼” hole at 466 metres. The well is being drilled directionally from a surface location adjacent to the Dongara 24 and Dongara 31 wells to a target bottom hole location approximately 640 metres to the north of the surface location. The vertical depth to the prognosed top of the primary objective Arranoo Sandstone is 1400m, (1608 m measured depth). The proposed total depth of the well is 1,800m measured depth, including two 160m laterals. The well is expected to take 18 days to drill and complete. Preliminary co-ordinates for the surface drilling location are as follows:- Northing 6 764 173 Easting 307 418 Participants in Dongara 32 are ARC Energy Limited - 100% (Operator). Managing Director’s comment: “Dongara 32 is designed as a follow-up to the successful Dongara 31 well to test the production potential of the Arranoo Sandstone reservoir of the Dongara Field. The Arranoo reservoir lies above the Dongara Sandstone reservoir and has produced both gas and oil and the Dongara 31 well tested at approximately 7 million cubic feet per day of gas. The Dongara 32 well has been designed incorporating the results of Dongara 31 and will again test the production potential of this reservoir using a combination of high angle well bores and laterals. The surface location of the well is adjacent to the Dongara 24 and Dongara 31 wells. Because of the drilling rig’s proximity to Dongara 31 it is not possible to bring that well into production until Dongara 32 is completed. The objective is to then bring both the Dongara 31 and Dongara 32 wells into production as soon as the rig is released from Dongara 32.”