Oil Basins Limited (ASX:OBL) Backreef-1 Drilling Report No.7 At Canning Basin Operations

Melbourne, Oct 25, 2010 AEST (ABN Newswire) - Oil Basins Limited (ASX:OBL) wish to make the following ASX announcement relating to the drilling operations at Backreef-1, Backreef Area, Canning Basin, onshore Western Australia (WA):

1. As at 2:20pm WST 24 October, the Hunt Energy & Minerals Co. Rig No.3 drilling with a 216mm (8-1/2 inch) diameter bit had drilled Backreef-1 to a depth of 1500mRT, thereby satisfying the principal Farm-In condition under the Backreef Play Agreement, whereby OBL now earns a 90% Beneficial Interest and Operatorship to both the Backreef-1 well and the Backreef Area (subject to the normal assignment and stakeholder consents).

2. Present operations - after conducting a wiper trip at 1551mRT, Backreef-1 will now drill ahead from the current depth of 1551mRT to 1650RT (revised TD) prior to running electric logs and possibly a Formation Tester (FMT).

3. During the drilling of the production hole the following hydrocarbon fluorescence was observed in the Lower Laurel Member and Yellow Drum Equivalent formations (which are known oil productive reservoirs in the nearby Meda and Blina wells respectively) and will be assessed with electric logs to ascertain productivity:

-----------------------------------------------------Formation            Interval mRT    Fluorescence-----------------------------------------------------Lower Laurel Member     889-892    10% to 20% patchy-----------------------------------------------------Lower Laurel Member     892-895    25% patchy-----------------------------------------------------Lower Laurel Member     895-901    10% to 20% patchy-----------------------------------------------------Lower Laurel Member     901-1112   Trace patchy/ Yellow Drum Equivalent-----------------------------------------------------

4. Summary of predicted and assessed actual formation tops defined by Backreef-1 so far:

------------------------------------------------------------Formation     Predicted Formation Top   Actual Formation Top                       mRT                       mRT------------------------------------------------------------Blina Shale              54.4                     45------------------------------------------------------------Liveringa                74.4                     80------------------------------------------------------------Noonkanbah              201.4                    185------------------------------------------------------------Poole Sandstone Upper Member            439.4                    415------------------------------------------------------------Nura Nura Member        468.4                    450------------------------------------------------------------Grant A                 516.4                    520------------------------------------------------------------Grant B                 610.4                    615------------------------------------------------------------Lower Laurel Member     884.4                    889------------------------------------------------------------Yellow Drum Equivalent  910.4                    910------------------------------------------------------------Gumhole Formation       968.4                    955------------------------------------------------------------May River Unit         1236.4                   1231------------------------------------------------------------Clanmeyer Formation    1278.4                   1275------------------------------------------------------------Target ClanmeyerClastics (sst)         1500                     1501------------------------------------------------------------Total Depth (TD)       1600                Revised TD 1650------------------------------------------------------------

The OBL Directors are pleased with the performance of Hunt Rig No.3 and their petroleum advisers, appointed petroleum service companies and specialist logistic consultants in the drilling of the Backreef-1 well to date and successfully attaining the Farm-In depth pre-condition in a timely manner.

In accordance with ASX Listing Rules, during the conduct of Backreef-1 drilling operations, OBL will advise the market weekly (on Thursdays), or after concluding an important well drilling operation and/or obtaining an important assessment or result.

By funding 100% of the drilling and completion costs of Backreef-1, OBL is earning up to 90% of Backreef-1 and the Backreef Area.

For the complete Oil Basins announcement including figures, please refer to the following link:

http://www.abnnewswire.net/media/en/docs/64015-ASX-OBL-344213.pdf

Contact

Kim McGrath Chairman Oil Basins Limited Tel: +61-3-9692-7222 Email: admin@oilbasins.com.au http://www.oilbasins.com.au