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Mosaic Oil [ASX: MOS] - Update on fracture stimulation of Churchie-1 well

Australian oil and gas producer, Mosaic Oil NL (ASX: MOS) is in the process of evaluating the Hydraulic Fracture stimulation (�frac�) of its Churchie-1 well, located within the Churchie Field, PL 192, Surat-Bowen Basin, Queensland.

Early well response is encouraging.

The main frac pumping operations were completed on the morning of 24 May, and 80% of the planned quantity of proppant was pumped into the newly fractured reservoir.

Prompt flowback of the frac fluid occurred without the need for coiled tubing operations.

The well is still in the process of cleaning up, with gas being flared off as frac load fluid is recovered.

The main operation is now complete and the frac rig will be released within the week.

�We are pleased with progress to date.

The initial frac was completed satisfactorily and the early flow rate achieved is in line with expectations for the well,� said CEO Alex Parks.

�The work over the next weeks will be critical to defining a view on the commercial success of the venture, but based on the early results we are confident that the final outcome will result in increased flow rates.�

�Whilst it is still very early in the process, it is clear that we have already learnt enough from the first well to impact positively on future frac planning in terms of time and resources required.�

The Company will continue to clean up the well and evaluate flow rates, pressure and frac geometry data.

The Churchie-1 frac has been performed so that Mosaic can determine the optimal formula for fraccing in the Tinowon reservoir.

If the trial proves successful, the Company will further roll out the procedure to select wells in the Surat-Bowen Basin with the ultimate goal of enhancing gas flows from the tight gas reservoirs.

If successful, the application of fracture stimulation is expected to lead to significant increases in Mosaic�s total rates of production over the coming years.

For further information, please contact:

Investor Relations:
Sally Highducheck, Mosaic Oil
+61 2 9247 9324


Media:
Bill Kemmery, Fortbridge
+61 400 122 449


Steve Rotherham, Fortbridge
+61 421 488 320