Austral Pacific Energy Set to Grow Production and Revenue

    WELLINGTON, New Zealand, June 3 /CNW/ -- Austral Pacific Energy Ltd.
(TSX-V: APX; NZSX: APX; Amex:   AEN)
    Austral Pacific Energy announced today that it has closed its hedged oil
position and now will benefit from the full upside of the high oil prices,
which are currently around $125 per barrel.
    Austral's CEO Thompson Jewell commented, "Removing the hedge is a
powerful tool because it allows the Company to leverage unprecedented oil
prices at a time when we anticipate increased production from the upcoming two
well drilling program. We have worked closely with the bank who have shown
confidence in the company by financing this hedge close out program. Hedging
23% of the company's proven and probable reserves at $65 in 2006 was a prudent
decision but it is now important to close out this facility and capitalise on
today's $125 oil price."
    The oil price spike will also greatly benefit Austral in regards to the
remaining 77% of its unhedged reserves and the Company is now well positioned
to reap the benefit of immediately increased revenue from existing and
expected production. Austral has also purchased future price options at $90
per barrel to protect a portion of the future production revenue against a
significant fall in future oil prices.
    Austral is in the process of reducing its primary debt facility to the
bankers from $14.45m to $6.5m through utilising the proceeds from the sales of
its PNG assets announced previously.
    A $17.8m debt to the Company's bankers will be assumed as consequence of
the crystallization of the hedges. Austral will record a loss on this hedge in
the second quarter of some $8 million dollars on this transaction in addition
to the approximately $9.1 million of unrealized losses which were recognized
in fiscal 2007 ($7.3 million) and in the first quarter 2008 ($1.77 million).

    Web site:
    Phone:         Thom Jewell, CEO +64 (4) 495 0880
    None of the Exchanges upon which Austral Pacific's securities trade have
approved or disapproved the contents hereof. This release includes certain
statements that may be deemed to be "forward-looking statements" within the
meaning of applicable legislation. Other than statements of historical fact,
all statements in this release addressing future production, reserve
potential, exploration and development activities and other contingencies are
forward-looking statements. Although management believes the expectations
expressed in such forward-looking statements are based on reasonable
assumptions, such statements are not guarantees of future performance, and
actual results or developments may differ materially from those in the
forward-looking statements, due to factors such as market prices, exploration
and development successes, continued availability of capital and financing,
and general economic, market, political or business conditions. See our public
filings at and for further information.

For further information:

For further information: Thom Jewell, CEO of Austral Pacific Energy, +64
 (4) 495 0880, Web Site:

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