Austral Pacific Reports Results of A6 Well Drilling and Notification of Waihapa Production Station Temporary Shut Down

    WELLINGTON, New Zealand, July 4 /CNW/ -- Austral Pacific Energy Ltd.
    The current well program was designed to test additional reserve
potential in the greater Cheal area. The locations were chosen, based on the
regional 3D seismic data set to have potential for a thick gross sand package,
above the regional oil water contact.
    Cheal-A6 and A6ST wells were targeting a separate lobe of sand from the
main Cheal 'A' Pool, the Cheal-A7 well is classified as a step out well
targeting an extension to the same pool as the successful Cheal A3 and A4
    The company announces that the Cheal-A6 well reached a total depth of
1930m on June 26th, 2008.  The well intercepted an oil bearing MM3 Formation
as prognosed at approximately 1818m MD, but the net sand interval was
interpreted from electric logs to be some 2 metres thick, thinner than
prognosed and sub economic to complete and produce.
    The Joint Venture (Austral Pacific Energy Ltd 69.5% and TAG Oil 30.5%)
agreed to plug and abandon the MM3 zone in this well bore, set a whipstock
plug at 1359m and kick off a side track well to a targeted location
approximately 150m to the south of the original A6 penetration.
    Cheal-A6ST was drilled to a total depth of 1936m on July 2nd, 2008 and
intercepted the targeted MM3 sands as prognosed, well above the regional
oil/water contact, but again, while oil charged they were only some 2 meters
thick.  After evaluation of all subsurface data the Joint Venture has agreed
to plug and abandon the A6ST well as a sub-commercial hydrocarbon discovery.
    A new whipstock plug will be set in the wellbore and the rig will now
commence drilling the Cheal-A7 well from the same surface location.
    Commenting upon the result, Mr. Jewell Austral CEO said, "We were pleased
with proving that the oil water contact encompassed a larger Cheal field area
but very disappointed that the aggregate sand thickness in this location was
too thin to be commercially produced. While we are disappointed in the results
in this well we remain confident in the ultimate upside potential of the Cheal
field development and the Greater Cheal play trend. We have built well
appraisal failures into our overall planning and remain determined to bring
success to the JV and shareholders."
    In other news Austral has been informed by Origin that the Waihapa
Production Station is being temporarily shut down due to inadequate supplies
of gas to the facility from other sources. The Cheal field oil production
produces very small volumes of gas; most of which is used to operate the plant
and generate electricity into the grid. The minor amounts of residual gas,
some 150,000 cubic feet per day, is processed at the Waihapa Production
Facility and sold to Vector and carried to market through the Vector gas
transmission network system.
    As a result of the shut down, Origin has now informed Austral that the
processing of raw gas from Cheal into the Waihapa Production Station has been
suspended. Origin has proposed an option to allow the Cheal field to continue
producing at optimum rates and reinject its spare gas into one of its existing
reservoirs. Austral and Origin are working together to formalize an agreement.
    Commenting on the Waihapa Production Station shut down Mr. Jewell said,
"Access to market for both the gas and oil production from our Cheal field is
critically important to the company so we maintain plans to support multiple
contingencies. The field is capable of producing up to 1 million cu feet of
gas per day but currently only 150 thousand cu feet are excess to the Cheal
plant operations. Our current production of 420 barrels per day continues."

    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, Austral Pacific Energy Ltd., 
+64 (4) 495 0880, Web Site:

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