OIL BASINS ASSIGNED 35% INTEREST IN CANNING BASIN - BLINA BACK...

OIL BASINS ASSIGNED 35% INTEREST IN CANNING BASIN - BLINA BACK REEF PLAY JOINT
VENTURE AREA & HAS FORMAL OPTION TO ACQUIRE FURTHER 15%

The Company wishes to advise that on 4 January 2007 it formally executed a formal Deed of
Variation and Assignment Agreement with Golden Dynasty Resources Ltd (“Golden Dynasty”),
Terratek Drilling Tools Pty Ltd (“Terratek”) and Backreef Oil Limited (“Backreef”) whereby Oil
Basins is (subject to regulatory approvals) immediately assigned 35% of the Blina Back Reef Play
Joint Venture Area subject to the terms of the earlier Farmin Agreement executed on 29 May 2006.

Terratek is presently a wholly owned subsidiary of Golden Dynasty, but is in the process of being
acquired by Arc Energy Limited (ASX code ARQ) – refer to ARQ’s complete announcement to the
ASX dated 6 December 2006.

Under the Variation Deed, Terratek consents to a partial assignment of an additional 15% from
Backreef’s remaining 35% participating interest in the Blina Back Reef Play Joint Venture Area to
OBL. The assignment is subject to OBL exercising an option to acquire the additional 15% by no later
than 31 March 2007 (the “Option”). Provided OBL exercises the Option, OBL will be entitled to have the exclusive right but not the obligation to the 15% participating interest by contributing a further $450,000.00 towards completion of the Drilling Program (as defined under the earlier Farmin Agreement executed on 29 May 2006). Upon Backreef satisfying its obligations under the Backreef Farm In (completion of the Drilling Program or funding the Drilling Program to $1.5 million) and provided OBL exercises the Option, the
participating interests of the parties shall be:
Terratek 30%
Backreef 20%
Oil Basins Limited (or Nominee) 50%

Under the Variation Deed, Terratek also consents to the assignment by OBL of all, or some of its
participating interest to a wholly owned subsidiary without having to obtain Terratek’s further consent.
OBL wishes to advise that these agreements have now been formally lodged with the Western
Australian Department of Industry Resources and also recognises royalties maybe payable to third
parties European Gas Limited (ASX code EPG) and Budside Pty Ltd (the latter under certain
conditions).

Brief Description of Backreef-1 Prospect
The Blina Back Reef Play Joint Venture Area (Figures 1 to 4), covers some 354 square kilometres,
contained within contiguous segments of Production Licence L6 and Exploration Permit EP 129, Parts
R2 & R3. This acreage is situated close to the existing Blina, Sundown and West Terrace oilfields.
Unlike many prospects previously drilled in the Canning Basin, the target of the Blina Back Reef
Prospect is not a Devonian reef but a postulated Devonian aged clastic turbidite (refer to Figure 2).
The prospect is located within an unique area called the “Kimberley Downs Embayment” which is a
half graben forming a restricted marine embayment. The embayment is bounded by the Harold and
Blina carbonate platform and reefal systems to the southwest and northeast respectively, opening to
the ancient Devonian sea to the southeast.
Figure 1
Geological Location Map
Figure 2
Schematic of Prognosed Stratigraphic Trap
The Blina Back Reef Play Prospect (refer to Figures 5 and 6) as planned is wholly situated within a
portion of existing Production Licence L6 – which was recently renewed by the Western Australian
Department of Industry Resources on 19 May 2006 for 21 years. The Prospect is also located in
close proximity to the under-utilised existing Blina Oil Hub comprising pumping and transport
infrastructure and a crude oil pipeline. As mentioned previously, Arc Energy has recently announced
their intention to acquire Terratek, the Operator of the Blina Oilfield and the Blina production facilities.
Figure 3
Location of Canning Basin Interests
highlighting the Backreef Farmin Area
(source ARQ ASX Announcement 6 Dec 2006)
Figure 4
Blina Back Reef Play Joint Venture Area
is situated adjacent to the producing Blina
Oilfield, Operated by Terratek
Figure 5
Prognosed Location of Backreef-1 Prospect on
Seismic Line BV93-17 and proximity of adjacent
seismic lines
Figure 6
Seismic line BV93-17 illustrating possible
acoustic impedence anomaly interpreted as a
clastic turbidite targeted by the
Backreef-1 Prospect
For more comprehensive details and Independent Geologist Report refer to Company’s
website www.oilbasins.com.au
As the proposed Blina Backreef Play Prospect (i.e. the Backreef-1 Prospect) is intended to be
drilled within existing Production Licence 6, any significant native title and environmental protection
issues are likely to be quickly overcome in the event of drilling success. Consequently, an oil
discovery is likely to be rapidly developed using the existing infrastructure located conveniently
nearby.
The Company is pleased to report that it has now successfully acquired a 35% net interest
(with ability to attain 50%) in potentially a highly-prospective but modest-cost 270 MMbbl oil
target defined by the Blina Backreef Play Prospect – a net upside assessed at 94 MMbbls
(based upon 35% net share) to 135 MMbbls (based upon 50% net share).
The technical information quoted has been complied and/or assessed by Mr Geoff Geary who is a
professional geologist (Bachelor Science – Geology) with over 26 years standing and who is also a
Member of Petroleum Exploration Society of Australia. Mr Geary has consented to the inclusion in this
announcement of the matters based on the information in the form and context in which they appear.