Adelaide Energy Limited (ASX:ADE) Holdfast-1 Weekly Drilling Report Ended 25 January 2011

Adelaide, Jan 25, 2011 AEST (ABN Newswire) - Adelaide Energy Limited (ASX:ADE) is pleased to release Encounter-1 weekly drilling report ended 25 January 2011.

- Well name: Holdfast-1

- Permit: PEL 218 (Permian JV)

- Participants: Beach Energy Ltd (ASX:BPT) (PINK:BEPTF) - 90% (Operator); Adelaide Energy Ltd (ADE) - 10%

- Primary targets: Roseneath/Epsilon/Murteree shale/sand/shale sequence ("REM" unit)

- Spud date: 21 January 2011

- Target depth (prognosed): 3625m

- Total depth @ end of current week: 776m

- Total depth @ end of previous week: 0m

- Metres drilled during week: 776m

- Activities during week: Spud well drill 17 1/2" surface hole from 0 - 776m

- Current activities: Drilling ahead

- Planned activities: Drill surface hole to +/-950m - set 13 3/8" surface casing - install BOP's, pressure test and drill 12 1/4" intermediate hole

Commenting on the spudding of the well, Adelaide Energy Ltd's Managing Director, Mr Carl Dorsch, said:

"We are pleased that we have now got over some weather issues which delayed the spudding of Holdfast-1, a well that is intended to contribute to the establishment of a potentially very large contingent resource of shale gas across the Nappamerri Trough. We are looking forward to the initial results from the analysis of the cores taken during the drilling of Encounter-1, which should be available over coming weeks.

We remain confident that we will complete this well and the further planned evaluation work (fraccing, core analysis etc) on both of the wells without any costs to ADE."

Contact

Carl Dorsch Managing Director Adelaide Energy Limited Mob:+61-0400-508-088 Email: c.dorsch@adelaideenergy.com.au Neil Young Chief Commercial Officer Adelaide Energy Limited Mob: +61-0417-850-245 Email: neil.young@adelaideenergy.com.au http://www.adelaideenergy.com.au