Petsec Energy provides drilling update

Due to deteriorating hole conditions the second well in Petsec Energy’s Hollywood Sand AVO Project, the CL&F#30-1 well (Triple Play), has not reached the proposed total depth of 13,606 feet measured depth and has been temporarily abandoned after reaching a measured depth of 13,163 feet.

The rig has been released.

The well did not reach the planned target depths. In the Company’s view it is unlikely that the AVO anomaly has been tested. While an LWD tool was used, electric line logs could not be run due to the deteriorating hole conditions.

The well data is being reviewed in the context of successful Hollywood Sand AVO discoveries made in this area. A resolution should be reached within a month to sidetrack the well or to plug and abandon. A provision for well costs to date of US$1.8 million will be made, pending that decision. Future drilling of the remaining prospects in the Terrebonne Parish Project is suspended, pending the completion of this review.