Oil Basins Limited (ASX:OBL) Renewal of Retention Lease R3 (Cyrano Oil Field)

Sydney, Oct 5, 2011 AEST (ABN Newswire) - Oil Basins Limited (ASX:OBL) are pleased to make the following ASX announcement relating to the renewal of Retention Lease R3 containing the undeveloped Cyrano Oil Field, offshore Carnarvon Basin, Western Australia (WA) so as to keep the market fully informed.

The WA Department of Mines and Petroleum (DMP) has accepted the Company's submission dated 9 June 2011 for the Renewal of Retention Lease R3. Following formal notification from the DMP, the Company has this week formally endorsed the Application, which is now waiting for Ministerial consent.

In brief, Retention Lease R3 will be re-awarded to Oil Basins Limited - as operator and the present 100% legal and beneficial holder - for a period of 5 years, with a minimum annual expenditure commitment of A$200,000 (to encompass further geological and geophysical studies, including those relating to the Nasutus Oil Field extension into R3, and advanced engineering studies for a possible scoping of a staged low-cost development / Extended Well Test).

Retention Lease R3 will be renewed as Retention Lease R3 / R1.

In anticipation of this pending renewal, during the September Quarter, OBL gave the go-ahead for a comprehensive scoping engineering study by our experienced petroleum engineering consultant DU-EL Drilling Services Pty Ltd (leveraging off similar low cost offshore development projects for international energy and petroleum clients in shallow water Philippines and Vietnam) using new stand-alone low-cost development concepts, the latest equipment and technologies (with an emphasis on pumping technologies and indicative recovery factors), which (subject to favourable screening economics) may be suitable for application to a staged low-cost development / Extended Well Test to produce from the Cyrano Oil Field (and similar small stranded offshore marginal oil field acquisition opportunities). It is noted that the Cyrano Oil Field lies offshore in only 17 metres of water.

We anticipate that we will have a preliminary in-house assessment completed during mid-October 2011 and will then release to the ASX a summary of the key findings of the DU-EL Report.

Background About Oil Basins Limited (OBL)

OBL is involved in exploration and development of oil and gas in the offshore Gippsland Basin, Victoria, the onshore Canning Basin of Western Australia and the offshore Carnarvon Basin, Western Australia.

Presently, the Company's portfolio includes:

- 12.5% Rights to Vic/P41 situated in offshore Gippsland Basin
- 17% registered interest in Vic/P66 situated in offshore Gippsland Basin
- 100% Beneficial Rights and operator Backreef Area, onshore Canning Basin
- 50% designated interest in EP5/07-8 situated in onshore Canning Basin and designated operator CSG and USG
- 100% registered interest and operator R3 / R1 situated in offshore Carnarvon Basin

OBL regularly performs in-house and external geological and geotechnical assessments of oil and gas sector farmins, investment and acquisition opportunities, and remains interested in expanding its portfolio in both upstream and downstream opportunities within Australia and internationally.

About DU-EL Drilling Services Pty Ltd

DU-EL Drilling has been in operation since 2008. DU-EL Drilling is a project management company that specialises in low-cost upstream energy developments both in Australia and internationally. DU-EL Drilling's aim is to provide cost conscious companies a way forward, by minimising upfront costs and providing an old-fashioned service. DU-EL Drilling understands, especially in the current financial market, that cash flow can be problematic and structures its proposals to alleviate these headaches and still provide a world-class service. As most marginal fields are uneconomic, with DU-EL Drilling's approach to this we believe we can make these more attractive financially.

Contact

Neil F. Doyle SPE Director & CEO Oil Basins Limited Tel: +61-414-912-901 Email: n.doyle@oilbasins.com.au