ANNOUNCEMENT TO THE AUSTRALIAN STOCK EXCHANGE: 10 FEBRUARY 2006 Zones of interest to be tested in North Yowlumne ST-1 Salinas Energy Limited is pleased to announce that a flow test program will be conducted in the North Yowlumne sidetrack-1 exploration well after identification of a number of zones of interest on evaluation (electric) logs. Although hole conditions prevented a full suite of electric logs from being run, a number of sandstone units within the target section appear to be porous and are characterised by high resistivities on the logs indicative of the presence of hydrocarbons. Initial interpretation of the well data suggests that a sequence of sandstone beds with character similar to that predicted pre well have been penetrated and it is anticipated that three separate zones will be tested for hydrocarbon content and flow potential. The test program will be conducted after running 4½ inch casing to protect the open hole between the 7 inch casing point at 11,938 feet and total depth (13,102 feet). Further details of the test program will be released once finalised. The well is testing a large oil prospect on the South Buena Vista lease area (in the San Joaquin Basin in California) in which Salinas Energy is earning 25.0%. The prospect has potential for a resource of over 100 million barrels of recoverable oil and is immediately adjacent to the 113 million barrel Yowlumne oil field. Drilling of the prospect is consistent with the Company’s exploration strategy to focus on strong flow rate reservoir targets in prospects with substantial oil reserves potential. Salinas is funding 50% of the cost of the well to earn its 25% interest. Partners in the South Buena Vista project are: - NEG (Operator of the initial exploration well) 12.5% - Ivanhoe Energy 50.0% - Salinas Energy 25.0% - Statesman Exploration 12.5% Enquiries- Managing Director: John Begg Contact Details: Telephone: 0419 903 268 Facsimile: 08 9322 6558
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