Austin Exploration Limited (ASX:AKK) Independent Expert Report Confirms Significant Niobrara Shale Prospectivity

Sydney, Sep 20, 2011 AEST (ABN Newswire) - Austin Exploration Limited (ASX:AKK), on behalf of its wholly owned US subsidiary Aus-Tex Exploration Inc ("Aus-Tex"), is pleased to announce receipt of the Independent Expert Report ("IER") over the Company's recently acquired Niobrara Shale acreage in Fremont County and Custer County, Colorado USA. Austin holds an 85% Working Interest and a 65% Net Revenue Interest in its 11,000 acres of Niobrara acreage.

The report, compiled by Mr William M Mitchell, provides an assessment and evaluation of Austin's 11,000 acres which overlie the Niobrara formation within the Denver Julesburg (D.J) Basin.

The independent expert has concluded that successful wells drilled into the Niobrara Shale are forecast to produce between 200,000 and 500,000 barrels of oil per well over a 10 year well life. Significant gas is also forecast to be produced from these wells, with cumulative production in the order of 280mmcf - 654mmcf per well.

Based on these cumulative production numbers and the typical production decline profile of a single horizontal Niobrara well, net cash flow per well (US$80 oil and US$4 gas) was estimated by the Independent Expert of US$2.4 million - $15.2 million per well, with an internal rate of return per well of between 19% and 140% based on the range of initial flow rates forecast.

The probability of achieving various initial production profiles were assessed as follows.

------------------------------------------------Ave Initial             Probability of Achieving Production (bbl/day)    Flow Rate------------------------------------------------>233	                  90%------------------------------------------------>300	                  50%------------------------------------------------>500	                  10%------------------------------------------------

When considering well spacing used by its peers based in the region, Austin believes that up to 64 horizontal wells could be completed over the Company's Niobrara acreage, resulting in 16 well pads with 4 horizontal wells per pad.

Commenting on the release of the IER, Austin Exploration CEO Mr Guy Goudy said: "These robust economics are highly encouraging as the Company moves towards the commencement of its initial drilling campaign at the Niobrara project".

"Importantly, the receipt of this report validates Austin's decision to acquire its expansive Niobrara shale portfolio, with a primary focus on oil," Mr Goudy said.

"Combined with the recent success of horizontal wells drilled into the Niobrara formation, the content of this independent assessment provides us with great confidence in the success of our upcoming drilling campaign and the significant oil and gas production potential that exists within our project area," he said.

Following a multi-well drill program which is due to commence in the coming weeks at the Company's Eagle Ford Shale Project, Austin will commence drilling at its Niobrara project early in 2012.

About the Niobrara Shale

The Niobrara is an unconventional resource play that has produced for over a century. Recent use of horizontal drilling and advance fracture completion technologies has significantly improved the production profile of the Niobrara play type with initial flow rates in to range of 400 to 1,100 bbls of oil per day being achieved.

The Niobrara formation is estimated to be approximately 500 feet thick across the project area. Whilst the primary production target is oil, it is anticipated that considerable gas may also be produced from successful wells. Within Austin's project area there is known faulting discernable at surface and basement faulting beneath the project area all of which provide confidence in the potential that exists within the project area.

For the complete Austin Exploration Limited announcement including figures and tables, please view the following link:
http://media.abnnewswire.net/media/en/docs/ASX-AKK-184560.pdf

Contact

Guy Goudy Chief Executive Officer Austin Exploration Limited GuyG@AustinExploration.com