Drillsearch Energy Limited (ASX:DLS) Receives A$3.5 Million Crude Oil Inventory Settlement

Sydney, Dec 23, 2010 AEST (ABN Newswire) - Drillsearch Energy Limited (ASX:DLS) (PINK:DRLLF) is pleased to announce that today it has received A$3,490,158 including GST from Santos Ltd (ASX:STO) in full and final settlement for the sale of all of Drillsearch's crude oil inventories contained in the Jackson-Moonie Crude Oil Pipeline. The settlement relates to Santos' purchase from Drillsearch of approximately 42,959 bbls of crude oil remaining in the Jackson- Moonie Crude Oil Pipeline. Drillsearch and other users of the Jackson-Moonie Oil Pipeline have all agreed to a joint settlement and sale of these historical crude oil inventories as part of Santos' overall closure and decommissioning of the Jackson-Moonie Oil Pipeline. The amount received isnet of applicable transportation and other associated charges.

Managing Director Brad Lingo stated: "This is a good outcome for Drillsearch and all the other parties and is part of a comprehensive restructuring of crude oil transportation arrangements serving the Eastern Cooper Basin. The overall process to complete this restructuring has taken over a year to complete due to the complexity of the historical arrangements and the overall number of parties involved. For Drillsearch this is particularly important as we have had a substantial amount of oil effectively locked up in the Jackson-Moonie Crude Oil Pipeline which was produced some time ago. This oil sitting effectively in the pipeline but not having been sold over the past year effected Drillsearch's crude oil sales revenues and it is good to finally receive sale proceeds for oil we produced principally from our Tintaburra Block Joint Venture interest some time ago."

Contact

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