Cue reached TD and intersected reservoir 10m high to prognosis...

Cue reached TD and intersected reservoir 10m high to prognosis with good oil indications. This is a very positive news indeed. After logs are run we will know what oil saturations and length of the oil column should be.
Anxious

Cue is pleased to announce that at 5am on 31 May 2002 the Southeast
Gobe 1 sidetrack well in Papua New Guinea was at a measured total
depth of 3240m and was preparing to make a wiper trip prior to
attempting to again run logs. The initial logging run encountered
tight hole conditions in a portion of the hole. The objective Iagifu
sandstone was encountered approximately 10 metres high to prediction
with indications of oil which will be evaluated using log
information.

SEG-1 ST-1 is being drilled as a deviated oil well to penetrate the
Iagifu reservoir approximately 300 metres to the northeast and
approximately 50 metres downdip of the current SEG-1 intersection.

A side track of the SEG-10 well will follow completion of SEG-1 STI.

Cue has a 3,285651% interest in the SE Gobe field unit, with a
Current overlift interest of 3.8565% to compensate for past under
lifting.

Participants in the SE Gobe Unit are as follows:

Cue PNG 3.3%
Chevron Niugini 7.9%
Exxon Mobil 5.9%
Merlin Petroleum 2.8%
Oil Search Limited 44.9%
Petroleum Resources Gobe 2.0%
Southern Highlands Petroleum 23.7%
Santos 9.4%
Total 100.0%

A location map is attached.

Any queries regarding this announcement should be directed to the
Company on 03 9629 7577.


R J Coppin
CHIEF EXECUTIVE OFFICER

A copy of the Depth Structure Map is available in PDF format on
www.asx.com.au. Alternatively it is available for purchase from ASX
Customer Service on 1 300 300 279.