Perth, Dec 19, 2007 (ABN Newswire) - Nido Petroleum Ltd (ASX: NDO) is pleased to announce the interim results from the Galoc appraisal programme. These are:

- Pilot well successfully drilled

- 38 metres of core recovered from the reservoir

- Full suite of logs acquired

- Five fluid samples collected.

Pilot Well Successfully Drilled

The pilot well was the first well drilled on Galoc since the drilling in the 1980s. The well was specifically designed as a 2,700 metre 'drill and abandon' hole to gather additional information on the reservoir in the southern part of the field and to optimise the Galoc 3 trajectory.

The well which was commenced on 14 October 2007 has now been plugged with cement. The top of the hole has been reused to drill the Galoc 4 horizontal production well.

Data acquired has undergone extensive analysis combining the log and pressure data with the recovered core. This work has been used to optimise the placement of Galoc 3 in the southern portion of the field. Whilst work is still ongoing, the results to date have confirmed the findings of the predevelopment studies.

38 metres of Core Recovered from the Reservoir

Some 37.8 metres of reservoir rock core was cut and recovered to surface during the drilling programme. The cutting of a core is carried out using a 'hollow' drill bit which encases a cylinder of reservoir rock and brings it to surface for physical examination and testing. It is the most direct method of examining the reservoir rock and testing its properties.

The core recovered from the pilot well is in excellent condition and testing is ongoing at the ACS specialist laboratory in Bangkok, Thailand. Nido staff have examined the core first hand and reported that:

- The core confirmed the presence of oil in the reservoir via its fluorescence under UV light.

- There is a greater proportion of productive reservoir to non-productive reservoir rock (i.e. net to gross) than was originally expected in the pilot well area.

- Reservoir average porosity is estimated to be within the predevelopment study range of 13-19%. This is another confirmation of the reservoir's potential to contain the estimated volumes of oil.

Full Suite of Logs Acquired

Wireline logs are acquired to determine rock type and properties, determine producible reservoir and test reservoir pressures. Logs are acquired using specialist tools that form part of the drilling tools and can 'run' into the hole on a 'wireline' when the hole is completed.

The results from the petrophysical analysis of these logs have been very encouraging. So far:

- The logs have confirmed that the well intersected the top of the reservoir at 2,180 metres below sea level which was within one metre of the predevelopment prognosis. This verification of the depth of the subsurface structure is critical to confirming the size of the reservoir.

- The logs have been calibrated against the actual reservoir rock from the core. An excellent correlation has been achieved from this comparison and the results applied to the interpretation of other collected data.

- The reservoir pressures obtained during MDT logging (modular dynamic testing) indicate an oil column at the pilot well location that is as anticipated in predevelopment studies and further validates the development plan and estimate of oil volumes.

Five Fluid Samples Collected

Fluid samples were collected to confirm the presence and type of oil in the reservoir rock. Five reservoir fluid samples were extracted using an MDT tool. The tool draws reservoir fluid directly from the formation under strictly controlled conditions. The samples are then brought to surface and transferred to pressurised containers in preparation for analysis at a specialist laboratory.

The samples have been sent to Schlumberger laboratories to be analysed to provide greater detail on the oil quality and properties. Water samples were also collected and will be tested to assist in calibrating the logs. The five fluid samples from the pilot well are now being analysed and the results are expected in 5-6 weeks time.

Excellent Results

Deputy Managing Director, Joanne Williams, said, "These are excellent results from the appraisal programme. Confirmation of oil in place has validated our positive view of the Galoc development and the analysis to date is consistent with the Gaffney, Cline and Associates reserves certification."

She went on to say, "The pilot hole has achieved all of our data gathering objectives and our subsurface team is gratified that it has confirmed our predevelopment studies. GCA is now reviewing all the new data as we take the next steps towards recertification of the reserves."

Project Cost Update

Following some interruptions to the drilling program, in large part due to the effects of three typhoons and mechanical problems, Nido now estimates the Galoc project cost to increase by US$4 million (net share), including contingencies.

Joanne Williams commented, "This cost increase reflects a risk which is part and parcel of oil field developments. However, the impact to schedule has been minimised and I am excited to report that first oil from Galoc is still expected in March 2008, a mere three months away."

A link to the daily drilling updates is provided on the Nido home page www.nido.com.au. Nido will provide the market with a weekly drilling summary each Wednesday and will continue to notify the market immediately of material events throughout the Galoc drilling programme.

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