Bounty Oil And Gas Nl (ASX:BUY) Nyuni 2 Well And Block Update - Tanzania

Sydney, May 27, 2011 AEST (ABN Newswire) - Bounty Oil & Gas NL (ASX:BUY) (PINK:BYOGF) is pleased to announce an update on the planned Nyuni 2 appraisal well, the Nyuni Block and Kiliwani North Gas Field developments, Tanzania.

Nyuni 2 Apraisal Well

Bounty expects the Nyuni 2 well to spud around 8 June 2011. Shareholders will be advised further on progress closer to the expected spud date.

The Caroil 6 drilling rig has been off -loaded to Nyuni Island where it is currently 50% rigged up at the location and additional equipment is being delivered. The 30" conductor pipe for the well has already been set.

Nyuni 2 will be drilled from the same lease location on Nyuni Island as the Nyuni 1 well drilled by the joint venture in 2004. The planned well depth is expected to be 3325 metres BRT.

Nyuni 2 Objective:

Nyuni 2 will appraise a location updip from the gas discovered in the Nyuni 1 exploration well in Albian/Aptian (Late Lower Cretaceous age) sands as well as testing the underlying Neocomian (Earliest Lower Cretaceous age) sands. It will test a large 4 way dip closed anticline. Although Nyuni 1 established gas in the Albian/Aptian sands it did not test those sands at that location. The Nyuni 2 well is designed to now test those sands and the expected Neocomian sands nearer the anticlinal top above the gas water contact.

The well will be deviated to the south-east at a declination of 60 degree.

The large Nyuni structure has the potential to contain over 1 Trillion cubic feet of recoverable gas and success in this well will have a major impact on Bounty's reserve position.

The Neocomian aged sands expected to be intersected by Nyuni 2 are the main reservoir sands at the Songo Songo Gas Field and at the Kiliwani North Gas Field (Bounty: 5% interest) located on Songo Songo Island 20 km south of Nyuni Island.

Success with Nyuni 2 will also lead to drilling of Fanjove North only 10 km further south from Songo Songo Island as part of the evaluation of the substantial prospect inventory within the Nyuni Block.

Nyuni Block PSA

A new PSA has now been negotiated with the Tanzanian authorities, which will include four additional, contiguous blocks to the north of the existing PSA area. Finalisation of the PSA is imminent.

Kiliwani North Gas Field

The Kiliwani North Gas Field ("Kiliwani North") was formally granted a Development Licence in April, 2011, by the Tanzanian Minister of Energy and Minerals. Commercialization is now moving ahead. A commercialization team has been installed and is progressing agreements for access to gas processing and transportation and for gas sales. A 3 kilometre, 6" pipeline connecting the Kiliwani North wellhead to gas processing facilities on Songo-Songo Island is scheduled for installation this year with first gas sales provisionally in early 2012. A shortfall in energy supplies in Tanzania will make Kiliwani North gas an important new component of the domestic energy market. Kiliwani North was discovered and tested in 2008 and an independent valuation carried out by Isis Petroleum consultants in 2010 attributed 45 BCF gas in place to it, on a Pmean basis. Reservoir modeling indicates that 73-83% of gas in place could be recovered from Kiliwani North.

For the complete Bounty Oil And Gas announcement including diagrams, please refer to the following link:
http://www.abnnewswire.net/media/en/docs/635957.pdf

Contact

Philip Kelso Chief Executive Officer Bounty Oil & Gas NL Tel: +61-2-9299-7200 Email: geo@bountyoil.com http://www.bountyoil.com