Ann: High Impact Drilling Program to Advance Colorado Potential, page-2

High Impact drilling program to advance Colorado potential
• Two Pierre shale wells to be drilled in 2014
• Pierre wells have produced more than 15 million barrels of oil on contiguous acreage
• Work on debt financing facility is progressing well

Austin Exploration (“Austin” or “the Company”) (ASX: AKK) today announced preparation is underway for the drilling of two new shallow, low cost wells targeting the prolific Pierre formation as their primary target as the next step in the development of its flagship 11,560 acre Pathfinder oil and gas property in Colorado. Austin has a 100% working interest in this property.

The decision to drill two Pierre wells follows the analysis of the oil discovered at its C-18#1 well in June, which further de-risked the Fremont County project, and the announcement of the commissioning of the Gas Processing of America (GPA) gas processing plant on the same acreage. It also reflects Austin's confidence in Colorado offering greater potential than the recent Eagle Ford success.
Austin Managing Director and CEO Dr. Mark Hart said work on these two wells has begun with access roads, pad-site construction and the surface and conductor holes currently being drilled and cased.

The wells, to be named C-01#1 and C-25#1, will be drilled in section 1 and section 25 to a depth of
approximately 4000ft, unless the Company decides to explore the Niobrara and other deeper formations in
these sections. Earlier discoveries have confirmed that hydrocarbons are present throughout the acreage that
Austin has drilled, and as such provides a significant uplift to the prospectivity and overall value of this project.
The two well locations were selected using a combination of well data from previously drilled off-set wells,
geochemical prospecting and exploration geophysics (Figure 1). This process identified areas that would show oil potential as well as dense natural fracture zones.

The Pierre shale has a strong history, having produced more than 15 million barrels of oil on the directly
adjoining acreage to Austin’s Pathfinder property in Fremont County. Prior to Austin acquiring the Pathfinder project in 2011, this property was held by mining companies and as such Austin believes that the oil and gas These two wells are expected to be completed in the fourth quarter 2014, meeting Austin’s primary drilling obligations in Colorado required to hold its acreage under its 28 year lease.

The Company is fully funded to meet the costs of its current drilling programs. Dr. Hart said: “Following the success of our exploration well in section 18 we will apply what we learnt from the lithology and plan to intersect the formation at a deviated angle into the Pierre which will allow for maximum oil liberation and production. Our recent oil discovery from our section 18 vertical exploration well is highly encouraging and we are planning to stimulate the well towards the end of the year. Each step reduces risk, improves targeting, and accelerates the move towards production and maximising revenue”, Dr. Hart said.