Exploration & Production | Deals - Joint Ventures | Reserves

AWE Begins Second Stage Testing at Senecio-3 Well

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AWE Limited as the Operator of the L1/L2 joint venture, provides the following update on the flow testing program at the Senecio-3 well, in the onshore Perth Basin, Western Australia.

The second stage of the testing program commenced on 8 March and is focused on the primary target in the upper Kingia Sandstone. A 10 metre interval (3,173m – 3,183m) was perforated without stimulation at 10:48 hours Australian Western Standard Time (AWST) and well clean-up operations commenced at 11:36 hours AWST.

A preliminary maximum gas flow rate of 18.5 million standard cubic feet per day (mmscf/d) was measured on a 48/64 inch choke. At the end of an 18 hour clean up period, the well flowed gas at an average rate of 12.3 mmscf/d with a well head pressure of 1,980 psig over a 5 hour period on a

36/64 inch choke. The gas composition was predominantly methane with only minor levels of carbon dioxide present (CO2 circa 2%, which is within gas pipeline specification).

The well will be shut in for a brief pressure build-up survey prior to a series of flow tests at various choke settings, rates and well head pressures over the next week. This will be followed by an extended pressure build-up survey with the full testing program expected to be completed by mid- April.

The Managing Director of AWE Limited, Mr Bruce Clement, said that the initial flow test results from the primary Kingia target confirmed the commercial potential of the recently discovered Waitsia gas field: "This is an excellent result for AWE, the local community and Western Australia. The initial flow test results confirm the Kingia Sandstone is a conventional gas reservoir capable of producing commercial flow rates of gas. It has also confirmed the potential for an exciting new gas play in the North Perth Basin.

"The Waitsia gas field represents an estimated gross 2C Contingent Resource of 290 billion cubic feet (Bcf) of gas with significant upside of up to 1.17 trillion cubic feet (Tcf) of gas and we are planning to drill two additional appraisal wells on the Waitsia field this year to better define its full potential.

"AWE is also undertaking engineering studies on potential low cost, early stage development of the Waitsia gas field using existing gas plants and pipeline infrastructure to deliver gas into the WA domestic market.

"The Waitsia gas field has the potential to be a significant source of gas for the WA domestic market. The long-term outlook for gas prices in WA is positive and we have commenced work on gas marketing."

AWE estimates that the Kingia and High Cliff Sandstone intervals in the Waitsia gas field have gross Contingent Resources in the range from 65 billion cubic feet (Bcf) to 1,170 Bcf, with a best estimate (2C) of 290 Bcf. The Dongara/Wagina formation is estimated to contain an additional 70 Bcf gross 2C Contingent Resource.

Further appraisal of the Waitsia field is planned for late May with the drilling of the Waitsia-1 well, 3km to the east of Senecio-3 in L1/L2. This well will follow the planned Irwin-1 exploration well in EP320 (operated by AWE under an agency agreement with joint venture partner, Origin Energy) that is scheduled to spud in late March. Irwin-1 will target multiple reservoir objectives including the Kingia and High Cliff Sandstones approximately 6km east of the Senecio-Waitsia Fields.

Joint Venture Partners:

• AWE Limited: 50%
• Origin Energy Resources Ltd: 50%