Burleson Energy Limited (ASX:BUR) Sale Of Austin Chalk Wells And Acreage For A$1.5 Million

Sydney, Mar 24, 2010 AEST (ABN Newswire) - Burleson Energy Limited (ASX:BUR) is pleased to advise that is has agreed to the sale of its Austin Chalk wells and acreage for U$1.344 million (A$1.5m) to Whittier Energy Company with an effective date of 1 January 2010.

BUR will retain small royalty interests in two producing wells drilled by other companies on the acreage since mid 2009. These are: 1.3% overriding royalty in Apolonia #2 (which is on production) and ~1% overriding royalty interest in the Walkoviak #1 well (currently drilling). In addition BUR will be retaining ~1.5% overriding royalty interest in future wells drilled in approximately 6,700 acres.

BUR Executive Director Michael Sandy commented:

"Following the late 2008 BUR Board decision to change focus from drilling Chalk wells to targeting conventional Texas gulf coast reservoirs, the Company has not directly participated in Chalk wells since the Marlin 2 well was completed in late 2008. Five wells had been drilled for five discoveries and all the wells are still on production, albeit at relatively low rates given they are in the late production stage. The sale price is a good one and represents a value equating to ~NPV 7% based on AKG's financial modelling using current gas prices.

While the wells have been providing monthly revenue for BUR this was offset by ongoing and increasing costs in the form of annual lease rentals and lease renewal fees. With time BUR would be faced with more decisions whether to pay lease renewals or allow the leases to lapse. Either path was leading to a reduction in value of the acreage to BUR.

However, the key element in the decision to sell the assets is the ability to access additional funds for our "drilling war chest" and to repay debt to AKG. It will also mean the Company will have more cash to contribute to the drilling the very large Woppa prospect later in 2010.

We can now fully focus on spudding the first of three back-to-back Wilcox wells in late March/early April 2010.

Contact

Mike Sandy Managing Director Tel: +61-2-9450-2002 Fax: +61-2-9986-1753 Email: info@burlesonenergyltd.com www.burlesonenergyltd.com