AED should be due to issue update based upon next steps from the...

AED should be due to issue update based upon next steps from the last ASX ann on progress from QUARTERLY REPORT on 30 SEPTEMBER 2006 issued Oct 31 2006

Lots of things happening at AED!

NEXT STEPS
The next significant steps for the Company are as follows.
- Finalise Reserve evaluation for Puffin North East and Puffin South West.
- Finalise planning, procurement and financing for the Puffin-8 well.
- Award installation Contracts.
- Commence FPSO fabrication and upgrade.
- Delivery of all major subsea installation components.

SUMMARY OF QUARTERLY HIGHLIGHTS
Production
• AED announces possibility of achieving higher initial oil production from additional well.

Geological
• Geological and engineering review of results from Puffin-7 and Puffin-9
o Onnia seismic survey re-processing completed.
o BHPP seismic survey data acquired.
o Preliminary geochemical studies completed indicating source and migration paths.
�� Swan graben source; multiple charges and water washing.
�� Biomarker and isotope studies underway.
o Increased oil in place and reserves announced.

• Planning for additional production well (Puffin-8 )
o Drilling planned for January 2007 to provide higher initial production rate at first oil.
o Engineering studies undertaken for flow assurance to optimise production capabilities including FPSO process system.
o Reservoir simulation studies to forecast production performance.
FPSO and Installation

• FPSO due to arrive at Keppel shipyard 1 November 2006.

• Installation contracts nearing finalisation for installation in early 2007.

Geological and Engineering Review
The Company is continuing to review and re-evaluate previous drilling, testing and seismic data accumulated from the Puffin field over the last 30 years in the light of the positive drilling and testing results of the Puffin-7 and Puffin-9 wells.

This review includes the integration of seismic data with the geological model of the source and distribution of oil. Part of this work has comprised the reprocessing of the Onnia 3D seismic dataset. The re-processing, undertaken by Petroleum Geo-Services Asia Pacific Pte Ltd (PGS), was completed during the quarter. This re-processing has led to a significant improvement in the quality of the data and the results are now being incorporated into new mapping of the Puffin field by integrating the re-processed data with the complementary dataset recently acquired from BHPP.

The Company is progressing towards the development of a revised reserves statement. To achieve this, the Company is working to incorporate:
• drilling data obtained since 1972;
• PSDM data originally utilised by the Company;
• The reprocessed seismic data referred to above;
• the newly acquired BHPP data set; and
• reservoir simulation.AED Oil Limited (AED or Company) is pleased to present its September 2006 Quarterly Report.

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