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  1. 154 Posts.
    MOSAIC OIL NL 2002-06-17 ASX-SIGNAL-G

    HOMEX - Sydney

    +++++++++++++++++++++++++
    (ATP471-MYALL BLOCK-SOUTH EAST QLD)

    The Churchie well has reached TD at 2124 metres.

    The Churchie 3 well intersected the primary target zone on Sunday
    afternoon and flowed gas at 20 million cubic ft a day through a 1
    inch choke with a stabilised surface flowing pressure of 743 psi from
    the Permian Tinowon Sandstone. Condensate and LPG are present and
    their levels will be released to the market as soon as laboratory
    analysis has been completed.

    This is one of the largest gas flows recorded in the Surat/Bowen
    Basin area of Queensland and indicates the potential of a virtually
    untapped Permian province controlled by Mosaic Oil.

    The Chairman of Mosaic Oil Dr Don Stammer remarked: "The
    Churchie-Noorindoo complex is a company maker that could be worth
    around $125 million to Mosaic Oil".

    The flow is from a 27 metre interval from 2097 metres to 2124 metres.

    The Churchie No 3 well is situated about 6 kilometres from a main gas
    trunk pipeline near the town of Surat in south-east Queensland.

    Although Santos is a participant in the field the well was drilled
    100% by Mosaic Oil. Santos has a buy back option into the Churchie 3
    well at a significant premium. The two companies have been in
    discussion this morning and will now begin to discuss field
    development and gas marketing.

    Mosaic has the right to drill one more solo risk well (Norkam 1) in
    the Churchie - Noorindoo complex provided the well is spudded by
    early November 2002.

    Dr Howard Brady CEO said: "We have followed (with their advice) the
    techniques of the Canadians who cracked the key to the Canadian
    Permian rocks which other companies did not understand. The Churchie
    3 well indicates that the large potential of the Permian rocks has
    been hidden by damage done by drilling muds. Future air/nitrogen
    drilling can now unlock the large potential of these rocks".

    Dr Brady further remarked: "Mosaic stands by earlier comments that
    the Churchie structure has the potential to hold well over a hundred
    billion cubic ft of recoverable gas. The Churchie-Noorindoo
    structure as presently mapped covers 50 sq kilometres".

    Interest in Churchie 3 well: Mosaic 100%

    Interests in the Churchie-Noorindoo Complex: Mosaic Oil 49%(Operator)
    Santos Group 51%.


    Steven C McDowell,
    COMPANY SECRETARY

    For comment please contact myself or Dr Howard Brady on 9247-9324.



 
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