austin to drill third mississippi well

ASX ANNOUNCEMENT 13th February 2012
· Austin to drill third Mississippi well
· Mississippi well targeting production in Second quarter
2012
Austin Exploration Limited (“Austin” or “the Company”) (ASX: AKK), on behalf its wholly owned US
subsidiary Aus-Tex Exploration Inc., is pleased to announce the go-ahead for a new well to be drilled
on the Company’s Mississippi oil-producing fields.
Austin Directors said that the decision to drill a third well in Mississippi, to be called the Bourke #4
well, had been expedited following the Company’s recent successful share placement.
Austin’s Chief Executive Officer, Mr Guy Goudy, said the Bourke #4 well would provide a further boost
to the Company’s USA oil production operations in Mississippi, Texas and Kentucky and is targeted to
come on line during the second calendar quarter of 2012.
“The Company is pleased to advise that the drilling of Bourke #4, our third major project in Mississippi
and the first well on the HiLo Prospect (Austin 50% working interest) in Adams County, will be
underway shortly, with engineering already completed and the staking of the drill site underway,” he
said.
“The operator on the HiLo Prospect is the same Mississippi-based operator that Aus-Tex joint
ventured with on the successful Armstrong and Commencement oil projects. Aus-Tex will participate
in the HiLo Prospect at a 50% working interest for a net revenue interest of 36%,” he said.
“As was the case for our Armstrong and Commencement wells, the operator is the only other partner
in the project and carries the remaining 50% working interest.”
Mr Goudy said Aus-Tex will spend approximately US$560,000 on drilling and completing the Bourke #4
well.
ABOUT THE HILO PROSPECT
The HiLo prospect is located in Adams County, Mississippi. The purpose of this well is to re-drill the
last producing, structurally high well, in the Parker and Campbell Sands Formations. Secondary
objectives that will be tested by the Bourke #4 well include the Wilson, Baker, and Benbrook Sands
that have produced or have shows of oil in the surrounding wells.
Austin Exploration Limited ACN 114 198 471
Listed on the Australian Securities Exchange (“AKK”) and the OTC-QX International in the USA (AUN-XY)
7985 W. 16
t h
Ave, Lakewood ? Denver , Colorado 80214
Level 1, 160 Queen St reet ? Melbourne, VIC 3000
GPO Box 2850 ? Melbourne, VIC 3001
2
Both the Parker and Campbell Sands produced in the Channel O&G Bourke No. 3 well. The Parker
produced 9,127 barrels of oil before being recompleted in the Campbell Sand. The Campbell produced
100,402 barrels of oil before being plugged as an orphan well.
The well will be drilled to a depth of 6,400 feet producing from the Campbell and Parker Sands
formations if successful. The estimated recoverable reserves from this well are calculated to be
between a minimum of 140,000 to 190,000 barrels of oil.
FORMATION OVERVIEW
The Parker Sand in this prospect is a fluvial channel sand that has a maximum thickness of 133’. The
structure map indicates the oil is trapped in a low relief structural closure (Figure 1). A well drilled at
the proposed location should encounter the Parker Sand 7’ high to the Channel O&G Bourke No. 3.
Initial production is expected to be about 80 BOPD.
The Campbell Sand is also a fluvial channel sand that cut the regional Campbell Sand, a shallow marine,
blanket or sheet sand. As depicted on the Campbell Structure Map, there are numerous preserved
meander loops that trap the oil stratigraphically on low relief structural closures, (Figure 2). A well
drilled at the proposed location should encounter the Campbell Channel Sand 11’ high to the Channel
O&G Bourke No. 3.
Figure 1: Structure Map: Top of Parker Sand
Austin Exploration Limited ACN 114 198 471
Listed on the Australian Securities Exchange (“AKK”) and the OTC-QX International in the USA (AUN-XY)
7985 W. 16
t h
Ave, Lakewood ? Denver , Colorado 80214
Level 1, 160 Queen St reet ? Melbourne, VIC 3000
GPO Box 2850 ? Melbourne, VIC 3001
3
Figure 2: Structure Map: Top of Campbell Sand
The Company looks forward to updating the market as to the progress of these projects once drilling
operations commence.
COMPETENT PERSONS STATEMENT
In accordance with ASX and AIM rules, the information in this release has been reviewed and approved
by Mr. David T. Greene, Sr. Reservoir Engineer, Fidelity Exploration and Production Company. Mr.
Greene holds a Bachelor of Science Degree in Earth Science and a Master of Science Degree in
Petroleum Engineering and has over 30 years of oil and gas experience including exploration, drilling,
completion and production. His background also includes evaluation, design and implementation of
Austin Exploration Limited ACN 114 198 471
Listed on the Australian Securities Exchange (“AKK”) and the OTC-QX International in the USA (AUN-XY)
7985 W. 16
t h
Ave, Lakewood ? Denver , Colorado 80214
Level 1, 160 Queen St reet ? Melbourne, VIC 3000
GPO Box 2850 ? Melbourne, VIC 3001
4
improved and enhanced recovery projects as well as pressure transient analysis, fluid properties and
petrophysics. He is a member of the Society of Petroleum Engineers and the American Association of
Petroleum Geologists. Mr. Greene has the relevant experience within the industry and consents to the
information in the form and context in which it appears.
MEDIA INVESTOR CONTACT
Guy Goudy
Chief Executive Officer
Austin Exploration Limited
[email protected]
Phone: c/o HLB Mann Judd 03 9606 3888
ABOUT AUSTIN EXPLORATION:
Austin Exploration is an Oil and Gas Company with assets in Australia and the United States. Austin has strategically shifted its
core focus towards non –conventional shale exploration in the United Sates. The Company has now established a major
presence in two of Americas most prolific oil and gas basins. Austin controls more than 11,000 acres in Colorado in the
Niobrara Shale and over 5000 acres in Texas in the Eagle Ford Shale. Austin has producing oil and gas wells in Texas,
Mississippi and Kentucky. Austin also has a highly prospective Oil and Gas Licence, PEL 105, in the Cooper Basin of South
Australia. The company’s wholly owned US Subsidiary, Aus-Tex Exploration Inc, turned cash flow positive in January 2011. To
face future opportunities, Austin has strengthened it board and management teams. Austin is listed on the Australian
Securities Exchange (ASX code: AKK) and on the OTC-QX International in the United States (AUN-XY)