Austin Exploration Limited (ASX:AKK) Eagle Ford Shale Drilling Success

Melbourne, Dec 13, 2011 AEST (ABN Newswire) - Austin Exploration Limited (ASX:AKK) - on behalf its wholly owned US subsidiary Aus-Tex Exploration Inc- provides the following update on drilling of the Krueger #1 well, the first well on the Company's Eagle Ford Shale project at the Birch Prospect in Burleson County, Texas, USA.

Drilling of the well - the first of an initial three-well program on the Company's Eagle Ford Shale project - has now been completed to a total depth of 9325 feet. The originally planned total depth was extended by 125 feet due to the lithology of the stratified layers being approximately 40- 60 ft lower per formation.

The final stages of drilling - including the primary Eagle Ford formation target - produced further highly encouraging hydrocarbon shows following the previously reported positive results from upper level formations.

Full production and flow testing of the well is being targeted for the end of January 2012, with the setting of production casing already underway. A dual-producing oil and gas well is being considered as an option to maximise cash flows.

Final stages of drilling the Kruger #1 well encountered the priority Eagle Ford formation from 8829- 9102 feet included the following results:-

- Excellent oil shows evidenced in the Eagle Ford with heavy trace oil

- Mud logs revealed evidence of open fractured shale

- Two good gas shows evidence up to 533 max gas unit

Results from drilling of the lower Georgetown formation between 9179 - 9325 feet included:

- Gas shows evidenced up to a max of 440 max gas units

- Encouraging to see gas below the oil bearing formation with a possibility of this gas acting as a natural lifting mechanism

"We are delighted with the results from this well, especially considering that this is the first of our initial three-well Eagle Ford program, and that with our 5000 acre property, we have the ability to drill up to 16 oil wells at 320 acre spacing," Austin's Chief Executive Officer, Mr Guy Goudy, said today.

"Based on these highly encouraging hydrocarbon shows seen throughout drilling of the well, Austin is immediately moving forward with the setting of production casing, completing the well and preparing for production start-up," he said.

"Based on the very promising gas shows also experienced in the upper Taylor Sands Formation of up to 955 max gas units, a dual producing oil and gas well is being considered to maximise possible cash flows. It is expected that the well will be in full production by the end of January 2012."

Weatherford Laboratories on site logging crews have completed the logging process including Array Induction, Density/Neutron , and Gamma Ray Logs. Weatherford, in conjunction with Aus-Tex Engineering personnel, is currently evaluating and analysing all logged data in order to design and implement optimal production efficiencies. Based on the results, the Aus-Tex engineering team will develop the most appropriate single stage frac design to enhance optimal oil and gas production.

The Krueger #1 well - being drilled by Coastal Rig #7 - is Austin's first well to be drilled on the Eagle Ford prospect in which Austin has a 93.5% interest.

The Krueger #1 well is being completed and fracced as a vertical well. Initially, three vertical wells will be drilled at which time the formation characteristics will be analysed by the Aus-Tex geological and engineering teams.

The well demonstrating the strongest hydrocarbon potential will be the first well to be re-entered for a multi-stage horizontal "HiWay" frac.

Contact

Dan Peterson JohnstonWells Public Relations Phone: 303-623-3366 Email: dpeterson@johnstonwells.com