Rabalais 35 No.1 Production Liner and Tubing Set

13 January 2012 Rabalais 35 No.1 Production Liner and Tubing Set Turner Bayou Chalk Project Rabalais 35 No.1 (8.8% Working Interest / 6.6% NRI)

The Rabalais 35 No.1 well in the Turner Bayou Chalk project is nearing final completion and being prepared for production.
Tubing has been run in the vertical section of the well and a three and a half inch slotted production liner has been installed in the horizontal leg. This completion technique is different to that which was adopted for the Deshotels 20H and 13H wells and has been successfully demonstrated in a number of recent Austin Chalk wells which have been drilled by Anadarko. Anadarko's Lacour 43-1 well, which initially tested at over 3,000 barrels of oil per day and is the highest initial rate achieved to date in the region, was completed by this method.
The drill rig has been released and demobilisation has commenced. Flow testing is scheduled to begin after the drill rig is off site and testing equipment has been set up; it is expected to take 7-10 days.
Our regular weekly updates will resume when flow testing begins. Shareholders will be kept informed as these activities progress.

About Turner Bayou

Pryme has a 40% working interest in 24,000 acres (9,600 net acres) in the Turner Bayou Project and is initially targeting development of the Austin Chalk horizon. A total of 30 Austin Chalk well locations are possible within the project area based on a 640 acre well spacing.
The Rabalais 35 No.1, which is being drilled by Anadarko Petroleum, is the third well in which Pryme has participated in the Turner Bayou project. The recently completed Deshotels 13H well (Pryme 40% WI), which is 4 miles south of the Rabalais 35 No.1, returned an initial test rate of 1,167bpd of oil and
600mcf/d of natural gas despite a sub optimal completion method and is now shut in pending the installation of a downhole pump prior to the commencement of commercial production.
The Rabalais 35 No.1 is targeting the same Austin Chalk objective as the Deshotels 13H and, if successful, will provide further evidence of the commerciality of the Austin Chalk formation in this region. Recent successful wells in and around Turner Bayou are detailed in Table 1 and Figure 1 below. Pryme plans to spud its fourth well in the Austin Chalk prior to April 30, 2012.
In addition to the Austin Chalk potential of the Turner Bayou project area, Pryme is aware that several companies have achieved encouraging results from tests of the Eagle Ford and Tuscaloosa Marine Shales in proximity to Turner Bayou, these formations are included in Pryme's Turner Bayou leases. The Company will continue to monitor this activity and update the market as appropriate.

Table 1: Louisiana Department of Natural Resources www.sonris.com

Nelson Energy as operator denotes Pryme owned wells

Figure 1

For further information please contact:

Justin Pettett Ryan Messer Managing Director Chief Operating Officer Pryme Energy Limited Pryme Energy Limited

Telephone: [phone] Telephone: [phone]

Website: www.prymeenergy.comASX Code: PYM OTCQX Code: POGLY

Competent Person Statement

The information contained in this announcement has been reviewed by Mr Greg Short, BSc. Geology (Hons), a Director of Pryme who has more than 33 years' experience in the practise of petroleum geology. Mr Short reviewed this announcement and consents to the inclusion of the geological and engineering descriptions and any estimated hydrocarbons in place in the form and context in which they appear. Any resource estimates contained in this report are in accordance with the standard definitions set out by the Society of Petroleum Engineers, further information on which is available at www.spe.org.