“The Flour Bluff gas field development project operator, Texas Crude, has advised in the daily well report at 1500 hours, 3 March 2005 (Texas time) that the BG Webb-1 well was drilling ahead at a depth of 2,882 metres, after tripping for a new drill bit at 2,819 Metres,” Victoria Petroleum said in a statement.

“As expected, from 2,712 metres the well drilled mainly grey shale with minor white sandstone. At 2,841 metres a good gas show (2.6% total gas in a background of about 0.4%) with corresponding drilling break (rapid increase in penetration rate) over six metres, was observed in target “J” sandstone.

“A second gas show (2.8%) with a peak at 2,857.5 metres occurred in inter-bedded sandstone and shale. A third gas show (1.5%) with a marked drilling break occurred in “J” sandstone between 2,868 and 2,876 metres.

“The gas shows confirm the presence of gas in the target “J” sands drilled to date but the significance of the gas shows will not be known until wireline logs are run and interpreted.”

Over the next few days the well is programmed to drill through the full “J” sands target section, which includes up to five separate sandstone potential reservoirs, to about 3,048 metres. The “J” sands are the primary development target reservoirs in the Flour Bluff development program.

After reaching 3,048 metres in 8 1/2 inch hole, the drilled section will be wire-line logged to evaluate the reservoirs, Victoria Petroleum said.

A seven-inch liner will then be run and cemented to protect the reservoirs while the final section of the well is drilled to test the deeper “K” sands targets below 3,120 metres.

The BG Webb-1 well is programmed to reach a total depth of 3,810 metres in about 42 days from spud, but as of Friday the well was presently 19 days from spud and ahead of schedule, according to Victoria Petroleum.

The Flour Bluff gas project is located adjacent to Corpus Christi on the Gulf Coast of Texas. Project leases are some 10,200 gross acres in extent encompassing both adjacent onshore and offshore production units within a larger area of mutual interest.

The initial Flour Bluff gas development project program calls for a minimum three-well exploration drilling program targeting multiple sand reservoirs as well as field development activity of a recompletion/work over program on four wells from February 2005 to June 2005.

BG Webb-1 is the first well in the exploration and development program aiming to significantly increase production and to enlarge the current Flour Bluff gas field 92.5 bcf proved, probable, possible reserve base to an estimated potential 300 bcf from multiple gas bearing sands between 1,980 and 3,500 metres in the large regional structure that underlies the Flour Bluff Gas Field leasehold lands.

BG Webb-1 is specifically targeting up to 20 billion cubic feet of recoverable gas in the combined “J” and “K” sands.