Mosaic perforated the lower 3m interval (2401.3 - 2404.3m KB) of an 11.5 m gross sandstone section of the Permian upper Tinowon Sandstone in the Rockhampton High-1 well with encouraging results.

“Whilst the well produced gas to surface at a rate too small to measure, the pressure survey that Mosaic subsequently conducted proved the presence of approximately 130 metres of oil in the tubing,” the company said in a statement.

The data collected from the pressure survey along with the presence of oil indicate that this Tinowon Sandstone reservoir is potentially a tight oil field, according to Mosaic CEO Lan Nguyen.

“Mosaic’s vertical and multi-lateral underbalanced drilling expertise will greatly assist the company to develop this reservoir for commercial production,” Nguyen said.

“We will undertake further specialised geological, seismic and engineering studies prior to making a decision on future development of the Rockhampton High area”.

Mossaic CEO Lan Nguyen said the presence of oil in Tinowon sands in Rockhampton High-1 was encouraging as it provided further evidence of the potential of a Permian stratigraphic trap on trend with the Churchie and Waggamba fields, and the possible existenced of a significant hydrocarbon fairway.

Meanwhile in PL 202 Mosaic is mobilising the Mitchell Drilling Rig 151 to the Waggamba-1 wellsite to drill Waggamba-1H.

The Waggamba-1 discovery well produced gas and condensate on an intermittent basis between 1981 and 1991.

Mosaic will cut a window in the existing casing string, and then drill and case the bend section just above the Tinowon Sandstone target. The Company will then use BJ Services coiled tubing drilling unit to drill underbalanced the lateral leg for up to 300 m through the gas reservoir. This work will be undertaken before completing the well for production and is expected to take place in late May 2005.

Mosaic Oil has 100% stakes in both of these permits.