hi guyswell considered commercial..no mention of flow rates at...

hi guys

well considered commercial..

no mention of flow rates at this point..

lets hope they are in line with Providence Resources announcement 14MMSCFGPD & 280BOPD.


Gawler Resources Ltd
Level 1, 33 Ord Street, West Perth WA 6005,
PO Box 637 West Perth WA 6872
Telephone: +61 8 9420 9300
Facsimile: +61 8 9481 2690
31 January 2007
Company Announcements Office
Australian Stock Exchange Limited By e-Lodgement
High Island-1 Well - Production Casing Run
Gawler Resources Ltd (ASX: GRL) (Gawler or Company) advises that the High Island-1 Well,
offshore Texas Gulf coast USA, has run production casing and has been temporarily
abandoned pending completion for commercial production. The drilling rig was preparing to
move off location on the 29 January 2007, Texas time.
Since our last report on the 17 January 2007, the following well operations were completed;
wire-line logging, side wall coring in the zones of interest, and wire-line reservoir testing using
an MDT (Modular Dynamic Testing) unit. Samples of reservoir fluids collected by the MDT were
analysed for composition and physical properties.
The well has confirmed the presence of good quality producible gas and condensate from high
quality reservoir sands in both the shallower zone, top at 6,823 feet Measured Depth (MD) and
the deeper zone, top at 9,704 feet MD. Reservoir thicknesses are broadly in line with pre–drill
expectations but the lower zone is gas saturated rather than the expected oil. This may be a
result of the well intersecting the deeper zone higher than prognosis.
Both zones correlate with hydrocarbon bearing sands in the six earlier drilled penetrations of
these sand units and are consistent with the pre-drill mapping of the 3D seismic data.
With the successful drilling of the first well a detailed development plan and feasibility study will
be prepared by the project operator and considered by the joint venture for implementation. This
work is expected to start immediately.
Background
Key aspects of the High Island Project are:
· The High Island oil and gas development project is located in 165 feet of water and is
surrounded by producing fields and associated oil and gas production infrastructure.
· Oil and gas was discovered and wire-line tested in several reservoirs in six wells drilled
between 1984 and 1989 but the discoveries were not produced due to low product
prices and reservoir continuity risk. All wells were located on 2D seismic .
· The acquisition of 3D seismic in 1995 and its re-processing on 2004 allowed the known
reservoirs to be individually defined, significantly reducing reservoir continuity risk.
· Reserve potential based on the 3D and existing drilling data is 3.2 million barrels of oil
and 38 billion cubic feet of natural gas, potentially recoverable from three new wells.

· The pre-drilling conceptual development plan, is for three new wells to be drilled from
one location and brought into production through a tripod or mobile production unit
connected by pipeline to a nearby existing production platform.
· The project has low reserves risk and with turnkey drilling arrangements and the use of
proven marine production facilities, has low engineering risk.
Drilling of the second and third wells is expected in late 2007. Subject to joint venture
agreement, pipeline construction could start in the near future. Subject to the
development plan, production via a tripod or mobile production unit could start by
February 2008.
· Acquisition and dry-hole costs were as estimated, at approximately $2.4 million.
· Federal and other royalties on production equate to 25% giving a Net Revenue Interest
(NRI) to Gawler of 22.5% (75% of 30%). In addition, the 30% WI is subject to an
arrangement allowing certain USA based private interests to “back-in” for 5.4% after the
interest holder has recouped its initial investment.
· There are no other Australian companies participating in the project.
As previously announced, Gawler has made an offer to acquire a 30 per cent working interest
(30% WI) in the High Island oil and gas exploration-development project in the Texas Gulf
Coast region.
The offer to acquire the interest in High Island has been made to ASX listed Aurora Oil & Gas
Limited (Aurora) (ASX: AUT), a company focused on major onshore US oil and gas
opportunities. Subject to shareholder approval at a meeting to be held on 23 February 2007,
completion of this transaction would result in Gawler acquiring the interest in High Island and
potential future opportunities in the shallow water of the Texas Gulf Coast identified by Aurora.
In return Aurora would become a major shareholder of Gawler with Board representation.
Under the terms of the agreement between Aurora and Gawler, the running of pipe (production
casing) satisfies Milestone A and therefore upon shareholder approval, 6,000,000 convertible
shares issued as part of the acquisition, will be immediately converted into fully paid ordinary
shares. Aurora will also have the option to acquire up to a further 6,000,000 options with a
subscription price of 1 cent each and exercisable at 20 cents each on or before 31 March 2009
to raise $60,000.
GAWLER RESOURCES LTD
Gary Steinepreis
Director
In accordance with the Australian Stock Exchange requirements, the technical information contained in this report
has been reviewed by P D Allchurch, BSc, FAIMM, MPESA, a consultant to Aurora. Mr. Allchurch has in excess of 5
years experience in his field of activity and he consents to the inclusion in the report of the matters based on this
information in the form and context in which it appears. Mr. Allchurch holds shares in Gawler Resources Ltd.