PEL 495

OTWAY BASIN
South Australia

ANNUAL REPORT

Permit Year 1, Term 1

for the period

March 2nd 2009 to March 1st 2010

PEL 495 Annual Report Year 1

 Contents

1 INTRODUCTION 3

2 GUARANTEED PROGRAM VERSUS ACTUAL WORK 3

3 EXPLORATION ACTIVITY 3
3.1 Drilling 3

3.2 Seismic Data Acquisition 3

3.3 Seismic Data Processing 4

3.3.1 Rock Physics Modelling / Feasibility Study 4
3.3.2 2D Seismic Reprocessing 4
3.3.3 3D Seismic Reprocessing 4
3.3.4 Seismic Inversion 5

3.4 Geological and Geophysical Studies 5

3.5 Planned Exploration Program for Year 2 5

4 ADMINISTRATION 5
4.1 Data Submission 5

5 COMPLIANCE 6

6 EXPENDITURE STATEMENT 6

PEL 495 Annual Report Year 1

1 Introduction

Petroleum Exploration Licence PEL 495 was granted on March 2nd 2009, for a five year term.
In accordance with the requirements of Section 33 of the Petroleum Regulations 2000, this
report covers the activities conducted by Cooper Energy Ltd in Year 1, from March 2nd 2009 to
March 1st 2010.

Current working interest in PEL 110 is as listed below:

Cooper Energy Ltd (Operator) 100%

2 Guaranteed Program versus Actual Work

The conditions of the Licence provided for unspecified geophysical/geological studies and
permit administration in Year 1. This was undertaken satisfactorily. Additionally, the seismic
reprocessing and petrophysics scheduled for Year 2 was undertaken instead in Year 1, with
the approval of PIRSA.

License Year Minimum Work Program Planned & Indicative Cost

Year 1 −G&G studies, administration − G&G studies, administration
(2/3/09 – 1/3/10)
Year 2 − G&G studies, seismic − G&G studies, seismic reprocessing &
(2/3/10 – 1/3/11) reprocessing & petrophysics petrophysics
Year 3 − G&G studies − G&G studies
(2/3/11 – 1/3/12)

Year 1 - 3 Commitment = $500,000 seismic reprocessing, inversion and G&G

Year 4 − one well − one well

(2/3/12 – 1/3/13) − G&G studies − G&G studies
Year 5 − one well − one well
(2/3/13 – 1/3/14)

3 Exploration Activity

3.1 Drilling

No wells were drilled during permit the permit year.

3.2 Seismic Data Acquisition

No seismic data was acquired during the permit year.

PEL 495 Annual Report Year 1

3.3 Seismic Data Processing

3.3.1 Rock Physics Modelling / Feasibility Study

A feasibility study was conducted by Fugro-Jason in order to determine the best type of
inversion for reservoir characterisation and potential identification of reservoir fluids. The
primary focus reservoir for the analysis was the Sawpit Sandstone and 5 wells were
used that intersect this section in and around the area of interest. High quality elastic
logs and AVO synthetics were generated and these have shown that simultaneous
inversion could be used to map pay sands within the Sawpit section.

3.3.2 2D Seismic Reprocessing

Approximately 672 km of 2D seismic reprocessing within PEL 495 was completed by
Fugro-Jason. There were 50 lines split over 10 vintages and the reprocessing was done
in conjunction with a 3D survey. 5 lines were identified for further AVO work and these
lines were given priority. Due to the planned AVO inversion project, it was decided to
process the data as close to true amplitude as possible with attention to be given to the
deeper Sawpit section. The shallow section suffered a little due to the attention given to
the deep. Therefore, to boost the shallow, an IQFILT and TauP post stack was applied.
The final migrated sections were then compared to the original datasets and minor
velocity editing was applied to seek further improvements.

3.3.3 3D Seismic Reprocessing

Reprocessing of the Tilbooroo 3D seismic survey (original acquired by Halliburton in
1993) was undertaken in 2009 by Fugro FSI coincident with a number of 2D seismic
lines from the same permit. The main objectives were to produce an amplitude
preserving product suitable for subsequent AVO and inversion analysis as well as
improved imaging across the mapped leads.

At the onset of the reprocessing, emphasis was placed on the primary reservoir target -
the Sawpit sandstone section. Early results showed encouraging improvements at this
level. Amplitude preserving techniques combined with the pre stack migration gave
improvements at this level. There was, however, some attenuation of the fault plane
information that needed enhancement. Further work, employing some different
interpolation parameters (and post stack TauP filtering), retrieved the fault plane
information at the expense of some shallow continuity.

PEL 495 Annual Report Year 1

 Two seismic datasets have been provided: a true apparent amplitude dataset for use in
the simultaneous inversion and a second in which AGC was applied in the prestack
domain to assist in event continuity and fault imaging.

3.3.4 Seismic Inversion

Simultaneous Inversion is currently being conducted on 5 2D seismic lines and the
Tilbooroo 3D seismic data.

3.4 Geological and Geophysical Studies

Work performed during the first permit year focussed on reinterpretation of the permit
dataset and the creation of a ranked prospect and leads portfolio. As a result of this
work, a Permit Interpretation and Prospectivity Report was compiled. This report
contains revised prospects and leads which have been risked and ranked, enabling
permit-wide potential hydrocarbon resources to be calculated.

A petrophysical interpretation was also undertaken on five wells, in order to gain a better
understanding of the characteristics of the primary reservoir facies. A Petrophysics
Report was compiled from this study.

3.5 Planned Exploration Program for Year 2

The remaining work commitment required to be carried out in Permit Year 2 consists of
unspecified geophysical/geological studies comprising finalisation of seismic
reprocessing and inversion with a view to advancing a prospect to drill-ready status.

4 Administration

4.1 Data Submission

No data was required to be submitted to PIRSA during the permit term.

PEL 495 Annual Report Year 1

5 Compliance

Cooper Energy, as Operator of PEL 495, has complied with all relevant conditions under the
Petroleum Act 2000 and the Petroleum Regulations 2000.

The activities covered by this report are administered under the Petroleum & Gas Act (2000)
and the Petroleum & Gas Regulations (2000).

There were no areas where non-compliance was identified.

6 Expenditure Statement

Pursuant to Regulation 33(3) under the Act, Cooper Energy Limited has submitted
to PIRSA a list of expenditure for Permit Year 1 as Appendix I.

PEL 495 Annual Report Year 1