Press Releases

Sydney, Aug 27, 2010 (ABN Newswire) - Drillsearch Energy Limited (ASX:DLS) (PINK:DRLLF) is pleased to announce that Circumpacific Energy Corporation (CVE:CER), the listed Canadian oil & gas subsidiary of DLS has entered into a definitive Plan of Arrangement Agreement to be acquired by Western Petroleum Commodities, Inc. ("WPC"), a private Canadian oil & gas company. CER is listed on the TSX Venture Exchange and trades under the code "CER.V". DLS holds 79.37% of the outstanding stock of CER and fully supports the Plan of Arrangement proposed between CER and WPC.

Under the Plan of Arrangement, CER shareholders will receive CDN $0.18 per share, a 100% premium over CER's 12-month volume weighted average share price. The Board of CER has unanimously approved and recommended the Plan of Arrangement as being fair and reasonable and in the best interest of all CER shareholders.

The total consideration to be paid by WPC to CER shareholders is approximately CDN $9.6 million (A$ 10.2 million) of which DLS will receive approximately CDN $7.75 million (A$ 8.26 million) upon completion of the Plan of Arrangement. As part of the Plan of Arrangement, DLS will also purchase from WPC any interest held by CER is the eight exploration tenements known as the SWQ Blocks which are held in joint venture by DLS and CER and operated by DLS. The acquisition of the interest in the SWQ Blocks will take place in parallel with the completion of the Plan of Arrangement.

The proposed Plan of Arrangement has already been reviewed and approved by the TSX Venture Exchange. The completion of the Plan of Arrangement is subject to the approval of 66-2/3% of the shareholders of CER. DLS has indicated to WPC that it intends to vote in favour of the Plan of Arrangement. It is expected that the Plan of Arrangement will be completed with the next 45-60 days depending upon completion of mailing out the Plan of Arrangement booklet to all CER shareholders.

Managing Director Brad Lingo stated "This is a great result for Drillsearch and all the other shareholders of Circumpacific. The sale of our interest in Circumpacific and the Canadian oil & gas properties allows Drillsearch to focus on its core activities in the Cooper Basin. The result is particularly good given the acquisition premium received by the CER shareholders."

Mr. Lingo further stated "The transaction also allows Drillsearch to focus on completing the Native Title clearance process for the SWQ Blocks and progressing an active exploration programme covering these lightly explored areas. Completion of the sale of our holdings in CER nearly completes the portfolio rationalisation process started a year ago divesting non-core assets and acquiring additional Cooper Basin interests that complement our four key businesses."

Contact

Brad Lingo Managing Director Ph: +61-2-9241-4440 Email: admin@drillsearch.com.au http://www.drillsearch.com.au