"These additional reserves have been recognised as a consequence of the drilling of the successful Worrior-5 and Worrior-6 development wells, continuing

strong production performance from the Padulla Oilfield, and the addition of new reserves from Stuart’s 50% owned Cleansweep-1 discovery," managing director Tino Guglielmo said.

"Stuart’s increased reserves base underpins its recent strong production performance, which is expected to continue for at least the remainder of the current financial year.

“Stuart’s production expectations for the full 2007/08 financial year are, as a result, now forecast to fall within the range of 525,000 to 575,000 barrels of oil."

Meanwhile, Stuart has been confirmed as the operator of offshore Gippsland Basin exploration permit Vic/P53, where the company plans to drill the Bazzard-1 well next September using the West Triton jack-up rig.

Stuart said the responsible joint authority had approved a submission to allow Stuart to earn an interest and become operator of the permit, which also involves Cue Petroleum, Moby Oil & Gas and Exoil.

As a result, the third year of the permit has been extended to October 15, 2008, meaning the entire six-year permit term would expire in 2011.

“Confirmation of the joint authority’s approval comes on top of Stuart having secured a drilling slot with Seadrill Management’s ‘West Triton’ jack-up rig,” managing director Tino Guglielmo said.

“The way is now clear for Stuart to proceed with drilling the Bazzard-1 well on Vic P53 next September.”

Stuart is farming in to 50% of the Bazzard structure by sole-funding the cost to drill the Bazzard-1 well.

It has the option to earn 50% in the entire permit, by sole-funding a second well.

Once Bazzard-1 has been drilled, Stuart will have 50% of any discovery, Cue will have 25%, Exoil 16.667% and Moby 8.333%.