Ian Reid
Bass Strait Oil Company Ltd

Bass Strait Oil Company Ltd (BAS) holds petroleum exploration interests in the Gippsland, Otway and Bass Basins of southeastern Australia. The BAS permit portfolio comprises almost 15,000 sq km (net interest approximately 8,100 sq km) across five offshore and two onshore permits, together with a royalty interest in production from the BassGas project. The permit interests are as follows (see inner back cober map):

• Gippsland Basin offshore (operator) Vic/P41 (45%), Vic/P47 (40%)

• Gippsland Basin offshore (non-operator) Vic/P42 (20% - after farmout)

• Otway Basin onshore PEP151 (25%) PEPA150 (15% option)

• Bass Basin offshore (operator) T42P (100%), T43P (100%)

During 2006 BAS interpreted a portfolio of 3D defined prospects in their Gippsland Basin acreage and successfully farmed-out interest in Vic/P42 to Apache. Subject to Apache Energy completing its farmin obligations in Vic/P42, BAS will be fully funded through the drilling of a well planned for early 2008. BAS is seeking expressions of interest from interested parties to farm-in on its other Gippsland Basin permits Vic/P41 and Vic/P47.

Vic/P41

Vic/P41 has been renewed for a new five year term commencing on 20 September 2006 The new work program requires studies in the first two years and 2D seismic acquisition in year 3.

BAS acquired the 575 km2 Oscar 3D in 2005 and seismic interpretation has resulted in an extensive portfolio of prospects and leads in Vic/P41 (see figure 1). Significant prospects have been identified which are analogous and along trend with the Kipper Gas Field and Basker/Manta/Gummy oil and gas accumulations. Kipling is a downthrown fault closure along the Rosedale Fault with Golden Beach reservoir objective. BAS is seeking farmin parties to earn an interest in Vic/P41 by funding the drilling of its 3D seismic defined prospects.

Vic/P42

BAS will be fully funded through the Marie 3D seismic survey in the first phase of a farmin by Apache Northwest Pty Ltd (“Apache”). Apache has budgeted up to $20 million for the survey. The second phase of the farmin requires Apache to fully fund the drilling of an exploration well in order to complete its obligations and thereby earn a 60% interest and operatorship in the permit. BAS and Inpex would each retain a 20% interest. The Marie survey will be the first 3D seismic data recorded in the western and northwestern areas of the Vic/P42 permit and will complete continuous coverage between existing 3D surveys. The survey will address a number of features identified on older 2D seismic as well as the 1983 Omeo gas and condensate discovery.

Vic/P47
A multi-disciplinary technical review of the Judith gas discovery is underway. The objective of this study is to investigate potential appraisal and development options for Judith, with reference to Nexus Energy’s successful production test of the Longtom-3 well to the west. The Judith study has incorporated basic well data from the 2004 Longtom-2 appraisal well, which has recently become open file.

Judith-1 (see figure 2) was drilled by Shell in 1989 and discovered gas reservoirs that share many characteristics with the Longtom field. Most significantly, the Judith and Longtom features both contain gas in the sandstones of the Emperor Subgroup. The tests at Longtom-3 in adjacent permit Vic/P54 have demonstrated for the first time that sandstone reservoirs in the Emperor Subgroup can flow gas at commercial rates. In Vic/P47, the Judith feature is covered by the same 3D seismic survey that was integral to the successful appraisal and testing at Longtom.

A positive result for the Judith study would see the potential of drilling an appraisal well to further delineate this prospective resource.

Onshore Otway Basin

BAS has a 25% interest in permit PEP 151 in the onshore Otway Basin. The Joint Venture is currently conducting a prospectivity review of the permit. BAS can earn a 15% interest in PEP 150 by contributing to the drilling of a well. This area contains the Lindon oil discovery, but the permit is yet to be awarded subject to negotiation of Native Title. The Tertiary Portland Trough depocentre covers the southernmost part of PEP151 & 151. BAS interprets an ‘oil fairway’ in this area of the Otway Basin.

Bass Basin

Following preliminary geological and geophysical studies and database acquisition, a seismic interpretation project incorporating all existing data in these areas is now underway. The results of this project will form the basis for planning future seismic acquisition. Permits T/42P and T/43P comprise a total of some 6,120 sq. km covering the Bass Basin’s Durroon Sub-basin off the north coast of Tasmania. 2D seismic acquisition is planned for 2008.

Phone: +61 (03) 9614 0426
Email: ian.reid@bassoil.com.au
Web: www.bassoil.com.au