ACQUISITION OF 50% INTEREST IN PEL 105 IN COOPER BASIN, SA • Adelaide Energy to earn 50% interest in PEL 105 on improved terms • Adelaide Energy to drill Pirie #1 in early 2010 • P10 potential of Pirie 1 in excess of 20 million barrels oil equivalent in place Adelaide Energy Limited (ASX code: ADE) is pleased to announce that it has reached agreement with Austin Exploration Limited (ASX code: AKK) for the accelerated acquisition of a 50% undivided participating interest in PEL 105, in the Cooper Basin in South Australia. The parties have agreed to vary and update their existing 2007 farmin agreement for PEL 105, under which ADE had the right to earn a 50% interest in the PEL upon completion of a farmin work program which included the drilling of one exploratory well within PEL 105. Under the revised agreement, ADE and AKK have agreed that the work program under the farmin agreement has been satisfactorily completed by ADE. ADE has made certain unanticipated but necessary expenditures to define and select the most attractive drilling location following extensive seismic surveys on PEL 105. This transaction puts ADE and AKK in joint venture to drill the Pirie #1 Well within PEL 105, and to carry out all future activities on PEL 105. Under the joint venture agreement: • ADE will be operator of the Pirie #1 Well (and any other programs); • ADE has agreed to free-carry AKK for the first $1.75m of well costs on Pirie #1, following which ADE and AKK will contribute proportionally to well costs, up to an agreed $3.5m cap; • ADE is entitled to the first $1.5m of net proceeds from the sale of petroleum products, in the event that the Pirie #1 Well results in a discovery in commercial quantities; and • AKK will re-imburse ADE a total of $400,000 if the Pirie #1 Well does not result in a discovery in commercial quantities, and is subsequently plugged and abandoned. • ADE will pay AKK $250,000. These transactions are conditional upon SA Government approval, and also on the agreement of various overriding royalty interest holders to the assumption by ADE of a proportional liability for royalty obligations applying to PEL 105, currently held by AKK. Registered Office Level 5, 70 Pirie Street, Adelaide SA 5000 www.adelaideenergy.com.au t +61 8 8228 5207 f +61 8 8228 3235 ABN 43 116 256 823 "This agreement is a good outcome for Adelaide Energy", said managing director Carl Dorsch. "It fits well with our suite of exploration and production assets, and strengthens our presence in the Cooper Basin, which remains one of the most exciting oil and gas provinces in on-shore Australia. Together with Austin Exploration, we believe the Pirie #1 well represents an exciting opportunity for shareholders due to its potential size. We look forward to a discovery in the Pirie #1 Well and a commercially beneficial relationship with our Joint Venture partner.” For further information contact: Carl Dorsch Rod North Managing Director Managing Director Adelaide Energy Limited Bourse Communications Pty Ltd Mob: 0400 508 088 Mob : 0408 670 706 [email protected][email protected] ASX Code : ADE About PEL 105 Petroleum Exploration Licence 105 (PEL 105) is an area of 215 sq km approximately 60 kms north of Moomba in South Australia. The prospect area is surrounded by producing fields, some of which are the largest in the Cooper Basin. Within the boundaries of PEL 105, but excised from it, are the Bimbaya Field (19 BCF of gas), the Bookabourdie Field (80 BCF of gas) and the Merupa Field (1.5 BCF of gas). There are large structures and multiple unconformities present within PEL 105, making for significant potential for accumulations of oil and gas to exist on the flanks of these regional structures. Adelaide Energy Limited has calculated a P10 (3P) reserves potential of some 20 million barrels of oil equivalent in place in the Pirie Structure.
