oil explorer makes quick oil discovery in surat ba, page-9

re: ann. after close up 15% ANNUAL GENERAL MEETING - TUESDAY 23 NOVEMBER

LONGREACH HAS NOT BEEN INVOLVED IN ANY DRILLING ACTIVITY FOR SOME TIME.HOWEVER, IT HAS BUILT UP A SOUND PORTFOLIO OF PROSPECTIVE EXPLORATION AREAS.DRILLING IS PLANNED ON SOME OF THOSE AREAS IN THE NEAR FUTURE.- YELLOWBANK CREEK #4IN OCTOBER, LONGREACH BECAME INVOLVED IN DRILLING OPERATIONS, THROUGHBRISBANE PETROLEUM N L, IN WHICH OUR SHAREHOLDING WAS RECENTLY INCREASED TO22%. THE WELL WAS DRILLED BY ENTERPRISE ENERGY N L IN P.L. 18 IN THE SURAT BASIN,QUEENSLAND, ON A FARM-IN WITH BRISBANE PETROLEUM N L, WHICH HAS 50% OF THATAREA. TESTING OF THE WELL INDICATED A 6 METER OIL BEARING SAND IN THESHOWGROUNDS FORMATION. A WORKOVER RIG IS SCHEDULED TO BEGIN COMPLETING THEWELL FOR PRODUCTION SHORTLY.THE SUCCESS OF THAT DRILLING ON YELLOWBANK CREEK #4 HAS LED TO AN INCREASE INLONGREACH'S SHARE PRICE RECENTLY. A TURNOVER OF OVER 45 MILLION SHARES IN ONEDAY WAS THE LARGEST RECORDED FOR SEVERAL YEARS.WHILST THE SHARE PRICE HAS RETREATED FROM THE 5 CENT RANGE, IT IS STILL WELLABOVE THE PRICE AT WHICH THE SHARES TRADED FOR MOST OF THE YEAR.MR KIN TJHIN WILL BE MAKING A PRESENTATION LATER, THAT WILL INCLUDE FURTHERINFORMATION ON THE YELLOWBANK CREEK #4 WELL.- 1 -LONGREACH OIL LTD - CHAIRMAN'S ADDRESS - 23.11.04- AREAS GRANTEDOF THE FIVE APPLICATIONS FOR PROSPECTIVE LICENCES WHICH WERE TO BE GRANTEDMENTIONED LAST YEAR, FOUR HAVE BEEN AND THE FIFTH ONE IS IMMINENT.- APPROVAL PENDING FOR QUEENSLAND AREATHE AREA AWAITING APPROVAL IS AN AUTHORITY TO PROSPECT (ATP-755-P) IN THE SURATBASIN IN QUEENSLAND, WHICH IS ADJACENT TO THE AREA WHERE THE RECENT DRILLING ONYELLOWBANK CREEK #4 OCCURRED. THIS AREA HAS TARGETS DELINEATED FOR IMMEDIATEDRILLING. A RE-ENTRY OF AN EXISTING WELL IS PROGRAMMED FOR EARLY IN THE NEWYEAR.LONGREACH WILL HOLD 50% OF THAT AREA, TOGETHER WITH BRISBANE PETROLEUM N L, INWHICH LONGREACH HOLDS A 22% SHAREHOLDING.- ONSHORE CARNARVON BASIN - W.A.THE RENEWALS LODGED OVER THE THREE EXPLORATION LICENCES IN WESTERN AUSTRALIA- ONSHORE, SOUTH CARNARVON BASIN (EP 369, EP 405 AND EP 410) - WERE APPROVED FOR A5 YEAR PERIOD. LONGREACH HOLDS 100% OF THOSE AREAS, COMPRISING OVER 7,000 SQ. KMS,WHICH ARE CONSIDERED TO HAVE SIGNIFICANT RESOURCE POTENTIAL FOR OIL AND GAS, ORBOTH.RENEWABLE ENERGYLONGREACH ALSO HAS AN INTERESTING PROJECT IN THE RENEWABLE ENERGYDEPARTMENT, HAVING BEEN GRANTED E.L. 6212 - A LARGE EXPLORATION LICENCE IN NEWSOUTH WALES (SYDNEY BASIN). THE RECENT DRILLING OPERATIONS OF GEODYNAMICS LTDIN SOUTH AUSTRALIA WILL BE AN IDEAL POINTER TO THE VIABILITY OF THIS RENEWABLEENERGY SOURCE.FUTURE EXPLORATIONEXPLORATION PROGRAMMES OVER THE NEW LICENCES ARE BEING PREPARED. PREVIOUSGEOPHYSICAL INTERPRETATION WORK DONE BY LONGREACH HAS ALREADY IDENTIFIEDABOUT 12 NEW LEADS ON THE WESTERN AUSTRALIAN AREAS. THE AREAS ARE BEINGUPGRADED THROUGH FURTHER GEOTECHNICAL STUDIES AND LONGREACH WILL SEEK JOINTVENTURE PARTIES TO PARTICIPATE IN THE PROPOSED DRILLING OPERATIONS.AS THE EXPLORATION AREAS ALREADY ACQUIRED AND NEW ONES APPLIED FOR ARE VIEWEDAS BEING PROSPECTIVE FOR SIGNIFICANT COMMERCIAL DISCOVERIES OF EITHER OIL ORGAS, OR BOTH, AND ARE CLOSE TO ESTABLISHED MARKETS AND PIPELINES, LONGREACH ISCONFIDENT THAT JOINT VENTURERS WILL BE FOUND WHO WILL BE PREPARED TO SHARETHE RISKS AND REWARDS THAT CAN COME WITH EXPLORING SUCH UNDER-EXPLOREDAREAS.- 2 -LONGREACH OIL LTD - CHAIRMAN'S ADDRESS - 23.11.04THE COMPANY'S AREAS ARE DESCRIBED IN DETAIL IN OUR ANNUAL REPORT, IN THEEXPLORATION REVIEW PREPARED BY MR KIN TJHIN. ALSO, DETAILS OF THE AREAS MAY BEACCESSED ON OUR UP-DATED WEB SITE AT www.longreachoil.com.ENERGY, GOLD & DIAMONDSSHAREHOLDERS WERE ALREADY ADVISED THAT LONGREACH REVERTED TO OIL AND GASEXPLORATION. OTHER RESOURCES ARE NOT EXCLUDED BUT HAVE NOT BEEN HIGH ON THEPRIORITY LIST. THE EXISTING DIAMOND AND GOLD INTERESTS HAVE NOT YET BEEN SOLD ORJOINT VENTURED AND NEGOTIATIONS IN THAT REGARD ARE BEING PURSUED.EQUITY CAPITALUNFORTUNATELY, SHAREHOLDERS DID NOT SUPPORT THE PROSPECTUS ISSUE MADE LASTYEAR - EVEN AT THE LOW PRICE OFFERED. FURTHER CAPITAL MAY BE REQUIRED FORFUTURE DRILLING PROGRAMMES, UNLESS FAVOURABLE FARM-OUTS ARE NEGOTIATED.FUTUREWITH THE OIL PRICE EVEN IN THE $30 RANGE, THE PROSPECTIVITY OF THE COMPANY'SAREAS, TOGETHER WITH PLANNED DRILLING OPERATIONS, SHOULD LEAD TO A DESIRABLEIMPROVEMENT IN THE MARKET CAPITALISATION OF LONGREACH. THE PRICE OF STOCKSLIKE LONGREACH CAN EASILY TREBLE ON A DOSE OF GOOD EXPLORATION RESULTS, ASSHOWN RECENTLY WITH OUR SHARE PRICE.I MUST REPEAT WHAT I HAVE SAID IN THE PAST:- "IT IS EVERY GENUINE EXPLORER'S AIM, OR DREAM, TO BRING A PROJECT INTOCOMMERCIAL PRODUCTION. LONGREACH IS A GENUINE EXPLORER AND IT WILL CONTINUETO PURSUE THAT AIM".- MORE OIL IN FAR AWAY PLACES ?AS MOST OF YOU WOULD BE AWARE, THE MOST PROLIFIC OIL RESOURCES ARE USUALLYFOUND IN AREAS WHICH ARE CONSIDERED INHOSPITABLE. WE SHOULD LOOK FOR OILWHERE WE KNOW IT CAN BE FOUND, NOTWITHSTANDING THE CONDITIONS. ANGOLA,NIGERIA OR RUSSIA ARE ALL OIL RICH COUNTRIES AND HAVE TO BE CONSIDERED FORFUTURE EXPLORATION, EVEN BY JUNIOR EXPLORERS.WHILST WE HAVE BEEN CONCENTRATING ON AUSTRALIA, ANY EXPLORATION SUCCESS INSUCH COUNTRIES COULD TRANSFORM LONGREACH - AS OCCURRED WITH SOME OTHERSMALL EXPLORERS WITH SUCCESSFUL OVERSEAS OPERATIONS (e.g. HARDMAN RESOURCES).- 3 -LONGREACH OIL LTD - CHAIRMAN'S ADDRESS - 23.11.04STAFFLONGREACH CONTINUED TO OPERATE DURING THE FINANCIAL YEAR WITH THE SERVICES OFAN EXPERIENCED CONSULTANT, MR KIN TJHIN, AND THE SMALL AND LOYAL STAFF FROMOUR MANAGEMENT COMPANY. LONGREACH IS CURRENTLY RUN "ON THE SMELL OF AN OILYRAG", IN ORDER TO KEEP COSTS DOWN. HOPEFULLY, THERE WILL BE ACTUALLY SOME OILSOON!MY THANKS GO TO MY COLLEAGUES ON THE BOARD AND ALL OTHER PEOPLE WHOCONTRIBUTED TO THE OPERATIONS OF THE COMPANY.SHAREHOLDERSLAST NOT LEAST, I THANK SHAREHOLDERS - THE OWNERS OF THE COMPANY - FOR BEINGSUPPORTIVE. THOSE WHO HAVE HELD SHARES FOR SOME YEARS MUST BE THE TRUEBELIEVERS. WE JUST NEED A FEW MORE OF THEM WILLING TO BACK THIS VITAL INDUSTRY.SHARE PRICESTHIS YEAR IS A GOOD EXAMPLE OF WHAT CAN HAPPEN IN THE RESOURCES SECTOR - THE OILPRICE HAS BEEN UP TO RECORD LEVELS, MANY SHARES HAVE GONE UP BY SEVERALHUNDRED PERCENT AND EVEN LONGREACH'S SHARES WENT FOR A BIT OF A RUN A COUPLEOF WEEKS AGO. I SHOULD SAY THAT NEITHER DIRECTORS NOR ANY COMPANIES ASSOCIATEDWITH THE DIRECTORS TRADED ANY LONGREACH SHARES DURING THAT PERIOD AS PER OUTINTERNAL CORPORATE GOVERNANCE GUIDELINES.WITH RENEWED DRILLING ACTIVITY, WE CAN LOOK TO HIGHER SHARE PRICES, EVEN IFCRUDE OIL WERE TO DROP TO $30 A BARREL