Sydney, Sept 26, 2008 (ABN Newswire) - Mosaic Oil NL (ASX:MOS)(PINK:MSAOF) is pleased to advise that production casing will be run in the Freneau-1 gas/condensate wildcat exploration well as a precursor to a cased hole production testing program after intersecting multiple sandstone reservoirs within the Permian sedimentary section interpreted from wireline logs to be gas bearing.

Highlights:

- Freneau-1 encountered a total 9.1 metres net gas pay within Permian sandstone reservoirs

- Mosaic Oil has a 100% interest in ATP 709P.

Freneau-1 (ATP 709P, Surat-Bowen Basin, Qld)

Wireline logs and a wireline pressure survey have been run. The wireline log interpretation has indicated that the well encountered:

- 3.3 metres of net gas pay in the Wallabella Formation interval 2379.7 - 2383.9 metres which were associated with elevated mud gas readings of up to 4300 units and trace pinpoint green fluorescence in the sandstone samples;

- 1.6 metres of net gas pay in the Tinowon Formation interval 2356.4- 2358.6 metres which were associated with elevated mud gas readings of up to 4362 units and 10- 20% dull spotted green fluorescence, very slow dull milky white cut in the sandstone samples;

- 1.5 metres of net gas pay in the Intra-Winnathoola Coal sandstone unit interval 2317.5-2319.7 metres which were associated with elevated mud gas readings of up to 2804 units and trace spotted - pinpoint dull green fluorescence in the sandstone samples; and

- 2.7 metres of net gas pay in the Bandanna Formation interval 2271.2-2286.3 metres which were associated with elevated mud gas readings of up to 2397 units and 3-5% dull yellow green spotted - patchy fluorescence, very slow dull milky yellow cut, moderately bright milky white crush cut in the sandstone samples.

The well will be cased and suspended with Century Rig #7 with a comprehensive production test program of various reservoirs to be carried out by the end of December 2008.

A 6 metre interval in the basal Rewan Formation interval, a secondary target in the well, had elevated mud gas readings of up to 150 units over 10 units background gas. Evaluation of wireline log and pressure data over this interval is inconclusive as to the potential of this zone, which will be further evaluated during the proposed production test program.

Mosaic Oil's Managing Director Mr Lan Nguyen said "The results of Freneau-1 are certainly encouraging and provide further support for the Company's long-held belief in the potential of the Permian play in this area. Freneau-1 is the last of the nine wells and the fourth exploration well to be drilled in Mosaic's 2008 drilling program which has resulted in five completions, three wells plugged and abandoned and Freneau-1 cased for testing".

Mosaic Oil has a 100% interest in ATP 709P.