Gas in Drilling Cores

Can anyone explain the reason for core drilling an exploration well.Can the well still be used for production or is it just to get samples.

Regards M.

PANCONTINENTAL OIL & GAS NL 2002-05-20 ASX-SIGNAL-G

HOMEX - Perth

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PEP 38330, EAST COAST BASIN. PANCONTINENTAL: 33.22%

The operator has advised that at 06.00hrs today Waingaromia 2 was
coring ahead at a depth of 289 metres in Lower Miocene age mudstones
with minor tight siltstones and tuffaceous sandstones.

Gas has been observed bubbling from fractures and minor porosity in
the cores at depths of 254.4 metres, 255.3 - 256.3 metres and 268.4
metres.

Waingaromia 2 is being continuously cored to a minimum depth of 500
metres over 15 days to evaluate the four reported oil and gas bearing
sandstone intervals intersected at depths of 143 metres, 238 metres,
341 metres and 398 metres in the 1880's Waingaromia 1 well which
reached a total depth of 402 metres. Below that depth, additional
sandstone reservoirs are predicted based on the local stratigraphy.

In order to evaluate the oil and gas bearing reservoirs intersected
in the Waingaromia 1 well, Waingaromia 2 will be continuously cored
from 35 metres to total depth. Continuous cores will provide detailed
geological and reservoir parameter data to assist in production and
development decisions. These core data will be of immeasurably higher
quality than that obtained in the l880's Waingaromia 1 well, drilled
using the percussion drilling technique.

The sandstone bed with hydrocarbon shows reported in the Waingaromia
1 at a depth of 142 metres has not been recognised.

Potential recoverable oil reserves of the Waingaromia, prospect,
based on the trap size determined by the seismic survey conducted in
2000, are estimated at 10 million barrels for the sands intersected by
the Waingaromia 1 well.

Flows of oil and gas to the surface at Waingaromia 1 were ignited by
the boilers and the rig destroyed by fire.

Pancontinental Oil & Gas NL and Indo-Pacific Energy Ltd have farmed
out a 10% interest in PEP 38330 to Sun Resources NL. Sun is
contributing 2O% of the dry hole drilling costs of Waingaromia 2 to
earn 5% from each of Pancontinental and Indo-Pacific.

Waingaromia 2 spudded: 10 May 2002.

Location of well: NZMG: 2 939 167 mE.
6 302 795 mN.

Operation since last report: Cored ahead in PQ (123mm), hole from
35.1m to 289m.

Drilling Rig: Century Drilling: -Rig 45

Proposed minimum total depth: 500 metres.

Primary Objectives: Sandstones, limestones and conglomerates of Lower
Miocene age from 143m to TD.

Hydrocarbon indications since last report: Mud gas bubbling from
fractures in cores 254.4m; 255,3-256.3m and 268m.



Note: All reported depths are referred to the rig rotary table
(mAHBRT)

(*ASX listed) Participants in the PEP 38330 Equity %
Joint Venture are;

*Pancontinental Oil & Gas NL
(through subsidiary Euro Pacific Pty Ltd) 33.22%

Indo-Pacific Energy (NZ) Ltd (Operator) 34.28%

* Origin Energy Resources NZ Ltd 22.50%

* Sun Resources NL (1) 10.00%

(1) Subject to completion of farmout obligations and Government
approvals.

enquiries:
Andrew Svalbe
DIRECTOR, CEO.

Tel: 08 9227 7178