An oil column of about 86 meters is inferred by the results of this test with 3D seismic mapping indicating a maximum structural spill point an additional 35 meters deeper below the base of the 36 meter thick oil bearing volcanic reservoir that would correspond to a maximum case structural closure of about 13.7 square kilometers in areal extent. Additional drilling will be required to fully define the extent and reservoir quality of this oil discovery.

The L44-W structure straddles the boundary between L44/43 and L33/43 with about 1/3 of the most likely mapped structural closure in L33/43 and 2/3 in L44/43. Confirmation of commerciality in the L33/43 portion of the structure by future appraisal drilling would mark the first production from this concession and be subject to very favorable tax and royalty treatment.

Additional exploration upside located in the area immediately north of L44-W in concession L33/43 (past the edge of 3D seismic acquired by POE in 2007) is poorly defined by a loose grid of fair quality 2D seismic data acquired in the late 1980’s. This will be an area of future focus.

The results of the L44-W well have established commercial production about 9.5 kilometers northeast of the NSE-F1 oil discovery (announced in March 2009) and 10.7 kilometers north east of the NSE central field producer NSE-C1, highlighting the potential of a large fairway north east of the main NSE central field that includes the deeper oil leg potential of the Bo Rang gas discovery (Bo Rang-1 was drilled in the 1980’s by a former joint venture of the concession).

Near term plans are:

– Twin the previously drilled Bo Rang-1 well targeting an untested 50 meter thick volcanic reservoir that correlates to the L44-W oil zone and sits immediately below a 25 meter thick volcanic reservoir that tested 5.5MMcf/d in the 1980’s. This location is already built with two cellars and ready to go when rig #14 has completed the drilling of the NSE-I1 exploration/appraisal well in about 14 days.

– Drill a second well on the L44-W drill pad vertically looking for the field oil water contact (and side tracking if encountered) upon expiry of the 90 day production test period under petroleum regulations. Simultaneous drilling and testing operations are not possible at this location due to the limited size of the drill pad.

– Complete and submit to the DMF, an application for a new production license (PL). This is anticipated to take about 45 days for completion/submission and an additional 90 days for approval.

– Simultaneously complete EIA’s on at least 7 surface locations from which multiple wells will be drilled. This is anticipated to take 45 days for completion/submission and an additional 90 days (minimum) for approval.

Ted Jacobson, Carnarvon Petroleum’s chief executive officer, commented: “L44-W is an important new discovery. Not only has a new oil discovery been made, which will result in additional production and reserves, the structure has been mapped by the operator to extend into the northern exploration permit L33/43. This will encourage further exploration drilling within this northern permit which has no established production yet. In addition it has increased the potential to find an oil leg in the area around the previously drilled Bo Rang-1 well to the south. The results of this well plus that of the recently drilled NSE-F1 well has significantly extended the area for oil potential outside of the producing Na Sanun East Field.”

Permit Holders: Pan Orient Energy Corp. (operator) 60%, Carnarvon Petroleum 40%.