Sydney, Mar 25, 2008 (ABN Newswire) - Mosaic Oil NL (ASX: MOS)(PNK:MSAOF) advises that as at 25 March 2008, the Fairymount-9 oil development well has been completed as a Showgrounds Sandstone oil producer.

Since the last report, the well was deepened from 2087 m to 2102 m for additional production rat hole. The 5-1/2" production casing was set and cemented at 2098 m. The perforating guns and 2- 7/8" production tubing string were run and landed in readiness for perforating the sub-unit "B Sand" from 2036 m to 2039 m.

The well has been secured and suspended awaiting a workover rig for the rod-insert pumping string installation. Mosaic Oil is expected to have access to a workover rig in April-May 2008. Century Rig 7 was released to Waggamba-4H on 24 March 2008.

As Fairymount-9 is the first well in the northern part of the field to have encountered the sub-unit "B Sand", Mosaic Oil has decided to complete this sub-unit and put it on production test first prior to perforating the sub-unit "C Sand" from 2042 m to 2049 m and probably the sub-unit "A Sand" from 2033 m to 2034 m. This is intended to provide additional data for maximising oil recovery and reserves from the field.

Waggamba-4H (PL 202 - MOS; 50% gas, 65% free oil/condensate)

- CS Energy has pre-paid $3.5 million for funding

Century Rig 7 is being moved from Fairymount-9 to the Waggamba-4H site, with drilling expected to commence by 31 March 2008.

CS Energy has pre-paid $3.5 million for funding the Waggamba-4H drilling, completion and tie-in costs, and will be entitled to 50% of gas production and 35% of free oil and condensate production from Waggamba-4H. Mosaic Oil will retain 50% of gas production and 65% of free oil and condensate production.

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