Stuart Petroleum ups Timor Sea interest

Offshore staff

ADELAIDE, Australia -- Stuart Petroleum has increased its holdings in the Australian Sector of the Timor Sea under an option agreement with Auralandia NL and other members of the Albers Group of Co.s.

Permit AC/P35 is contiguous with, and to the north of, Permit AC/P33 which holds the Oliver oilfield appraisal and development project (where Stuart is presently earning a 50% equity interest). Under the agreement, Stuart will fund the cost of acquisition and processing of a 224-km (139-mi) 2D seismic survey over a closure in AC/P35, the Fairfax structure.

The Fairfax structure is estimated to hold resources similar in size to the adjacent Oliver oil gas and condensate field, which has been assessed to contain mean in place oil and condensate of 84 MMbbl and mean gas in place of 810 bcf.

Following acquisition and processing of the Fairfax structure 2D seismic, Stuart will become entitled, at its option, to earn up to a 70% participating interest in AC/P35 under the terms set out below:-
• Stuart may elect to earn an initial 20% equity in AC/P35 by funding 75% of the cost of acquiring, processing and interpreting not less than a 250 sq km (97 sq mi) 3D seismic survey. This seismic will be acquired no later than April 2010
• Stuart may elect to earn a further 40% equity interest – to bring its interest earned to 60% - by funding 100% of the cost of drilling one exploration well in the permit by no later than April 2012
• Stuart may then elect to earn an additional 10% in AC/P35 – to bring its total interest in the permit to 70% - by funding 100% of the cost of an appraisal well.

07/28/2009