Ann: Phoenix South-3 Drilling Update, page-3

Carnarvon Petroleum Limited (“Carnarvon”) (ASX:CVN) is pleased to provide the following update on the drilling of the Phoenix South-3 (“PS-3”). Progress The well has drilled from around 5,210 metres Measured Depth (“MD”) down to around 5,393 metres MD through the Caley Member. While drilling through the Caley Member, a number of sandstone intervals were encountered in the section from approximately 5,200 metres MD to 5,300 metres MD that, from logging while drilling tools, were interpreted to be porous. Elevated gas readings and increased resistivity were observed across these sandstone intervals that indicate the presence of hydrocarbons. The positive observations in this section of the well now warrant wireline logging which will be undertaken from approximately 5,200 metres MD to 5,393 metres MD in order to obtain more definitive results regarding the nature of the hydrocarbons (oil, gas and condensate) and the characteristics of the reservoir within the zone of focus from approximately 5,200 metres MD to 5,300 metres MD. Current Operations The rig is currently preparing to run a suite of wireline logging tools. Forward Plan The acquisition of the wireline data which will complete the drilling and evaluation of the Phoenix South-3 well. Well Objective The primary objective for the Phoenix South-3 well is to evaluate the gas and condensate potential of the Caley Member within a large, faulted anti-clinal closure that was partially penetrated with the Phoenix South-2 well. Phoenix South-2 encountered gas and condensate in the Caley Member but was unable to drill through and evaluate the formation. The Phoenix South-3 well has been optimally designed to penetrate and evaluate the hydrocarbon bearing formations of the Caley Member. Phoenix South-3 is located around 560 metres North-North East of the Phoenix South-2 well.