Flax-1 exhibited good shows from the Patchawarra Sandstone on penetration and will return to drill the Tirrawarra Sandstone Formation upon completion of the DST.

The Joint Venture's second well and first success, Yarrow-1, has been analysed with a total of 17.6m of pay sandstone being interpreted within the 46m gas-saturated interval tested by the three drill stem tests conducted during the drilling of the well.

The gas accumulation penetrated by and upstructure from Yarrow 1 is estimated at 51bcf recoverable gas.

Pressure data from the drill stem tests indicates the gas column extends for at least a further 30 metres below the Yarrow intersection which equates to an incremental 7bcf recoverable gas.

Downstructure appraisal drilling will be required to delineate the full extent of the field in excess of the established 58 BCF gas and associated gas liquids.

On behalf of the PEL-103 Joint Venture Innamincka Petroleum has begun the task of examining options for the sale of the gas and liquids it has discovered at Yarrow and now, potentially, at Flax.

These options range from selling all production from the wellhead through to the commissioning of a gas processing plant and associated pipeline. The company's internal modelling indicates that a gas processing plant and pipeline becomes economically attractive once 50 bcf of dry gas has been amassed.

As a result of the company's early success investors have been quick to pounce with around five and a half million shares being traded in the last day resulting in a 50% rise in value to around 65 cents after opening at 45 cents and peaking at 70 cents.

Innamincka listed on the ASX on 3rd of November 2003 at 20 cents per share.

Participants in the PEL 103 Block Joint Venture are Innamincka Petroleum Limited (Operator) 35% and Vernon E Faulconer Australia Inc 65%.