Sydney, Sept 23, 2008 (ABN Newswire) - Mosaic Oil NL (ASX:MOS)(PINK:MSAOF) reports Freneau-1 reached a total depth of 2438 metres on 22nd September 2008. Current operation is attempting to free stuck drill pipes at 1915 metres prior to carrying out wireline logging operations to evaluate hydrocarbon shows in the reservoir targets within the Rewan Formation and the Tinowon Formation.

Fair to good gas shows with various oil shows (fluorescence) associated with sandstones were observed while drilling through the Triassic Rewan Formation and the Permian Bandanna Formation, Winnathoola Formation and Tinowon Formation, including a sandstone unit interpreted to be equivalent to the oil-charged sandstone unit tested in Rockhampton High-1.

The significance of these hydrocarbon shows will be evaluated by the wireline logging program expected to be completed by the end of the week.

Freneau-1 is a gas/condensate exploration well with the Tinowon Sandstone as the primary target and the Rewan Formation as the secondary target. The Freneau Prospect is located approximately 6km east of Taylor-11.

The Freneau Prospect Tinowon Sandstone primary target has the potential to contain an estimated recoverable gas resource of 28.9 BCF in the Mean case, and up to 71.2 BCF in the P10 case.

Update on 2008 Drilling Program

The 2008 drilling program will be concluded at the end of the Freneau-1 drilling operations. The MB Century Rig 7 will be released and demobilised to Roma. Mosaic Oil expects to commence the 2009 drilling program by the end of the March 2009 Quarter subject to the weather conditions and with an overall target of 10 wells for 2009 Calendar Year. Potential target wells would include Churchie-11, two Waggamba horizontal wells and up to 4 Taylor appraisal/development wells to boost oil,gas and LPG production and reserves.

In summary, the 2008 Mosaic Oil operated drilling program has drilled 9 wells with 5 successful wells and 1 well (Freneau-1) currently under evaluation. Among 5 successful wells, 3 wells are on production (Fairymount-9, Waggamba-4H & Taylor-18), 1 well (Taylor-19) is due to be connected for production and 1 well (Waggamba-5H) is due to be tested.

Commenting on the 2008 largest ever Mosaic Oil operated drilling program, Mosaic Oil's Managing Director said: "We are pleased to see that the commercial success rate of the current drilling program is well above Mosaic Oil's historical success rate of 44% in the Surat-Bowen Basin over a 7 year period from 2000 to 2007. We anticipate to see some meaningful increase in our production and also 2P and 3P hydrocarbon reserves by the end of this calendar year".