Drilling notification: Offshore Gilbert-1 well Gippsland...

Drilling notification: Offshore Gilbert-1 well

Gippsland Offshore Petroleum Limited is pleased to announce that drilling ofthe Gilbert-1 well in the Vic-P-47 Gilbert Block is scheduled to commence early October, 2005.

Notification has been received this morning that the Ocean Patriot rig is expected to be released to the Gilbert JV 30 September. Gilbert-1 represents Gippsland Offshore Petroleum’s first offshore well andmarks the commencement of their Gippsland Basin offshore explorationeffort.

On completion of the Gilbert-1 well, Gippsland Offshore Petroleum willhave earned a 51% interest in the Gilbert Block which also houses theFoster Prospect and the Limb Lead. The drilling is under the management of the Bass Strait Oil Company Limitedwho have executed 2 drilling options with the Ocean Patriot semi-submersible rig.

The rig is expected to be on site for approximately 11 daysdrilling to a total depth of 910m to test both the Gurnard and Strzleckireservoir potential. Under the farm-in agreement for the Gilbert Block, the Gippsland OffshorePetroleum is committed to 95% of the drilling costs of Gilbert-1 estimated at$5.7M (with the other 5% of the costs being borne by Eagle Bay ResourcesNL).

Vic-P-47 is located in the north of the Gippsland Basin over the LakeWellington Fault system and the Northern or Lakes Entrance Platform. It isnear the recently discovered Moby Gas Field and is 5km north of the PatriciaBaleen Gas Field.

The Gilbert Block is transacted by the gas pipeline fromthat field to the main Eastern Gas Pipeline. This pipeline provides access toall markets in the eastern and southern states of Australia. The Gilbert Prospect is a structurally controlled trap with reservoir potential inthe Gurnard and the underlying Strzlecki.

The prospect is fault-sealed up dipby the Lake Wellington fault system and top sealed by the Lakes Entranceformation. Displacement of oil from accumulations downdip of Gilbert by later gascharging is known to have likely occurred in the region. The Gilbert structureis on the migration pathway of displaced oil from the Tuna, Kipper andPatricia-Baleen fields which all measured a residual oil column.

It is these displaced oils that will be charging the Gilbert Prospect.

A Monte Carlo simulation has been performed to estimate the range ofpossible reserves should oil or gas be present in the structure.

The possibleoil-in-place ranges from 59MMbbl (90% confidence) to 198MMbbl (10%confidence) with a median of 141MMbbl. If the accumulation is entirely gas,the analogous range of recoverable reserves is 17bcf to 63bcf with a medianof 43bcf. An independent assessment of the prospect rates the chance offinding oil rather than gas in the prospect at 60%.