Drillsearch Energy Limited (ASX:DLS) Extended Production Testing To Resume On The Canunda Wet Gas Liquids Discovery, SA

Sydney, Aug 6, 2010 AEST (ABN Newswire) - Drillsearch Energy Limited (ASX:DLS) (PINK:DRLLF) is pleased to announce that it has been advised by the operator, Beach Energy Ltd (ASX:BPT) (PINK:BCHEY) that extended production testing is scheduled to resume on the Canunda Wet Gas/Liquids Discovery in PEL 106B in the South Australian Western Cooper Basin towards the end of the week of 9 August. The Canunda Wet Gas/Liquids Discovery and PEL 106B is owned by DLS (50%) and BPT (50%) as operator.

The joint venture has approved continuing the Canunda-1 discovery extended well production test for at least 2 weeks dependent up on how pressure and rate responds, in order help determine the hydrocarbon volume in place. The extended production test was initiated in late June and due to exceptionally high condensate/light oil production rates the initial 10-day test was choked back due to condensate/light oil storage and transportation constraints. Over the initial 10-day testing of the upper zone, the Canunda well has produced over 2500 bbls of 62o API condensate/light oil. The lower zone having produced 22 MMscf and 4,000 bbls of condensate/light oil After the initial 10-day test period, the extended production test was suspended due to road closure in the Cooper Basin because of heavy winter rains. During the suspension of the extended production test, BPT has procured additional liquids storage and arranged additional truck transport in order to allow higher production rates during the test period.

As previously reported on 7 July, initial production rates reached as high as 800 bbls/d of liquids. Testing of the well was choked back to a 12/64" choke producing 1 MMscfd of gas and 180 barrels of liquids per day at a stabilized rate with minor water production and minimal reservoir pressure decline. During this initial test period the Canunda-1 well maintained a CGR (condensate-to-gas ratio) of 180 bbls per MMscfd of gas production. In initial testing the well produced as high as 10.5 MMscf per day during clean up.
Continuation of the extended production test will enable the joint venture to determine the overall size of the wet gas condensate/light oil accumulation and plan for future appraisal drilling. When testing resumes the flow rate will be increased in order to establish the maximum stabilized gas and condensate/light oil production rates and reservoir pressure data. A sampling programme will also be undertaken. The operator has estimated that the extended testing program will provide up to 18,000 bbls or A$1.1 million additional revenue to the joint venture.

Once the extended testing programme commences, DLS will provide shareholders a full update on the commencement of the test and its progress.

Contact

Brad Lingo Managing Director Drillsearch Energy Limited Tel: +61-2-9241-4440 Website: www.drillsearch.com.au