16 September 2013 ASX Announcement MERLINLEIGH DRILLING AND PROJECT UPDATE (ASX: NSE) Highlights New Standard on track to spud Condon-1 at Merlinleigh Project in late 2013 On site civil works are well underway in preparation for the Enerdrill Rig #3 site mobilisation Well planning for Condon-1 at very advanced stage Initial farm out of Merlinleigh Project has progressed to final stages New Standard Energy Ltd (New Standard or The Company) is pleased to provide a drilling update for its Merlinleigh Project, located in the onshore Carnarvon Basin in Western Australia. Currently the Company is on schedule to spud its first well in the Basin, Condon-1, in the fourth quarter this year. In preparation for drilling, a series of ancillary work is currently underway to prepare access roads, the drill pad, water bores and other necessary site amenities. Heritage clearance has been granted and an environmental management plan (EMP) has been submitted and approved. The application for approval to drill a well was submitted to the Department of Mines and Petroleum (DMP) today. New Standard Managing Director Phil Thick said planning and onsite preparation operations were progressing as scheduled to ensure all civil work was completed ahead of the rig s mobilisation to site. We have a very clear forward program to ensure drilling preparation is executed smoothly and efficiently, he said. Currently, the Enerdrill Rig #3 (Rig #3) is in Mandurah, Western Australia, undergoing a series of final operations testing, which is expected to be finalised by mid-october. Enerdrill has been communicating regularly with New Standard about the progress of its preparations and New Standard has been regularly reviewing the rig s test results, mobilisation and rig-up schedules and operational plans, Mr Thick said. As part of the contract compliance requirements, a third party technical audit is scheduled to be conducted on Rig #3 in October. Once the audit process is finalised, Rig #3 will be mobilised to site. It is anticipated that once on site at Condon-1, the rig will take approximately ten days to complete the rigup. New Standard s management has assembled a highly specialised team to oversee the drilling activities to ensure drilling is conducted safely and efficiently, and we are pleased with progress to date, Mr Thick said. The Company is currently finalising all third party contracts in anticipation of mobilising equipment to site.
Condon-1 Well Objectives New Standard was encouraged earlier in the year after receiving the results of an independent scoping study which confirmed that the Company s Merlinleigh Project has significant conventional and shale/tight gas prospectivity which will be assessed concurrently in the upcoming drilling program. As a result the Condon-1 well has been designed in order to evaluate three distinct possibilities in the one well: conventional gas play with the potential of finding approximately 500BCF GIIP; a tight sand gas reservoir with a larger potential trap size; and an unconventional shale gas resource with a conservative estimate of 23TCF GIIP. Based on the Kennedy Range 1 well (1967) it is anticipated that the reservoir sands in the Condon 1 well are likely to be tight. As a result, the primary objective of the Condon-1 drilling campaign, which is a traditional, vertical well, is to gather a comprehensive, modern data set of the Merlinleigh sub-basin via a detailed evaluation program. The data gathered will be used to assess the resource potential of the tight gas and shale gas plays within the Company s acreage whilst also assessing the secondary conventional sandstone potential within the large structural trap at Condon-1. Based on the results obtained while drilling from mud logs and logging while drilling tools, an additional wireline logging program of appropriate scale will be run to complement the data suite. Using the wireline logging results, it is likely that a significant number of sidewall core samples will be obtained and if there is sufficient encouragement from all of these results the well may be suspended for later testing. Farm-out Update New Standard is currently assessing potential partnering options for the Merlinleigh Project and positive discussions are continuing with a number of potential partners. New Standard has the financial ability and confidence in the prospectivity of the target to drill this well as either a sole operator or with a farm-in partner. We are seeking to find the right partner on the right terms for our Merlinleigh Project prior to drilling, but we are prepared to drill the well at 100% equity and look at our options afterwards, Mr Thick said. Given the close proximity to major gas infrastructure, some early encouragement from the Condon 1 well could lead to further planning for additional exploration and/or appraisal of the Merlinleigh Project. On this basis, should we retain a 100% interest in the Project through the Condon 1 drilling, it will no doubt lead to further discussions with interested parties. Corporate Update Dr Mark Hagan has now moved into a Non-Executive Director role at the Company after five years in the role of Technical Director. The Board is now actively seeking a third independent director to comply with ASX recommendation on Board independence and expects to have an additional director with appropriate skills and expertise appointed before the end of the year.
New Standard Chairman Arthur Dixon said Dr Hagan had been with New Standard since the Company s very beginning and had played a vital role in the growth and development of the company to date. His industry experience and extensive geological and geophysical knowledge has been fundamental to the Company s success in obtaining some of the most prospective acreage for shale and tight gas in Western Australia, Mr Dixon said. We accepted Mark s request to step back into a Non-Executive role after expressing a desire to spend more quality time with his family and grandchildren. I thank Mark for his continuing support. For further information, please contact: - ENDS- Phil Thick Cameron Morse Managing Director FTI Consulting Ph: + 61 8 9481 7477 Ph: + 61 8 9485 8888 email: pthick@newstandard.com.au email: cameron.morse@fticonsulting.com About New Standard: New Standard Energy is an emerging hydrocarbon explorer with a mandate to explore for oil and gas. Its exploration and drilling program is active, well funded and extensive. The company s exploration program is underpinned and complemented by targeted corporate activity to take advantage of opportunities and to build an extensive pipeline of exploration projects. New Standard s board has extensive technical and commercial experience in the oil and gas sector. New Standard s Goldwyer Project has attracted world class partners in ConocoPhillips and PetroChina and the company has strong cash resources to explore and progress its broad project portfolio. The Company is primarily focused on aggressively progressing its oil and gas exploration portfolio focused on the onshore Canning and Carnarvon Basins in Western Australia. The portfolio includes: 100% (diluting to 25%) operated interest in EP s 443, 450, 451, 456 in Western Australia s Canning Basin 100% (diluting to 25%) operated interest in application areas 1/09-0, 2/09-0 and 5/09-0 in the Canning Basin 65% operated interest in EP417 in the Canning Basin 100% operated interest in the Seven Lakes SPA area in the Canning Basin 100% operated interest in the Merlinleigh project, onshore Carnarvon Basin Western Australia 32.5% working interest in the Colorado County Project, onshore Texas USA In addition to the above portfolio, New Standard has a 28.2% equity interest in ASX listed Elixir Petroleum Ltd (ASX: EXR). New Standard is also continuing to actively assess other opportunities to complement and expand its exploration portfolio.
Above: Civil works progress the road out to Condon-1
Above: Drilling water bores Above: Site preparations for Condon-1 drilling activities