🕐09.06.10 - 03:32 Uhr

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



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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) provides the following update on the Fracture Stimulation of the Churchie-1 well, located within the Churchie Field, PL 192, Surat-Bowen Basin, Queensland.

Key points:

� The Frac Job was operationally successful with approximately 200,000lbs of proppant successfully pumped into fractures created around the well across all perforated intervals.
� The post frac gas production rate has stabilised at approximately 0.5MMscf/d, and whilst double the pre frac test rate, the rate is less than was anticipated from the design.
� The Churchie-1 well will now be placed on production for sale of the gas and to gather further long term production performance data.
� Whilst slightly disappointing, the operation was cost effective, conducted safely and has provided a significant amount of data that will be used to refine the design of future frac jobs.
� Mosaic believes fracture stimulation is an appropriate technology to develop the tight gas reservoirs in the Surat-Bowen basin and plans are already being progressed for a second trial.

CEO of Mosaic Oil Alex Parks commented on the result: �The Churchie-1 frac, was Mosaic�s initial trial of the deep penetration hydraulic fracture stimulation in the Tinowon reservoir.

Whilst the current indication of gas rate is somewhat disappointing, the fracturing operation itself went well.

We have already learnt a lot from the initial trial, and will continue to evaluate the well over the coming weeks."

"It was always recognised that it may take us a few wells to refine the process and realise the full potential of the technology and of the Churchie wells.

We undertook this first trial operation primarily as a data gathering exercise, and there were a number of specific diagnostic elements incorporated into the operation (such as including tracers in the injected frac fluid and proppant), that we can now use to evaluate and refine the process for the next field trial."

"Overall, whilst the gas rate is lower than targeted, trialling the technology in an old well has been cost effective and a good data gathering exercise.

The data will be used to refine the planning process for future operations.

Mosaic believes that hydraulic fracture stimulation is an appropriate technology for development of the
Tinowon gas fields and remains confident we can achieve substantial increases in field production rates over the coming years�, said Mr Parks.

Please find more details in the attached announcement.

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



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