Sydney, Sept 1, 2008 (ABN Newswire) - Mosaic Oil (ASX:MOS)(PINK:MSAOF) is pleased to advise that the Taylor-19 gas/condensate development well reached a total depth of 2055 m on 30 August 2008 and will be completed for production initially as a Showground Sandstone gas/condensate well.

Taylor-19 (PL 16, Surat-Bowen Basin, Qld)

Highlights:

- Taylor-19 encountered 3.6 metres net gas/condensate pay in the Showground Sandstone reservoir target

- A possible new pool gas discovery of 23 metres gross thickness was encountered in the Moolayember Formation by the well

- Mosaic Oil has a 100% interest in PL 16.

Wireline logs and a wireline pressure survey have been run. The wireline log interpretation and pressure survey data have indicated that the well encountered approximately 3.6 metres of net gas/condensate pay over an interval from 2008 metres to 2012 metres in the primary target Showground Sandstone Formation.

The results have confirmed the presence of interpreted attic gas/condensate reserves located updip from the Taylor-16 oil and gas producer.

In addition, the well has encountered a gross 23 metres (net approximately 18 metres) of sandstone reservoir with elevated gas readings while drilling of up to 1413 units within the Moolayember Formation from 1917 metres to 1940 metres. Although the interpretation of wireline log and pressure survey data is inconclusive at this stage, the zone is potentially gas-charged. Further evaluation of this zone by cased-hole testing will be undertaken once the Showground Sandstone zone has been produced.

The Taylor-19 well will be cased and suspended with the Century Rig 7. The well will then be completed for production within 2 weeks and is expected to be connected to the Taylor gathering network by as early as the end of September 2008.

Mosaic Oil's Managing Director Mr Lan Nguyen said "Mosaic Oil's 2008 drilling program continues to produce successful wells. This new successful target well confirms the Company's strategic intent of moving 3P and 2P hydrocarbon reserves into proven producing reserves within our Surat-Bowen Basin assets".

"Following a very strong operational and financial performance for 2008, this is again very good news for Mosaic Oil shareholders. The second half of the financial year 2008 was particularly strong, and with more successful wells like Taylor-19 we think that the Company will achieve an increased revenue target of around A$30-A$34 million for the 2009 financial year," Mr Nguyen said.