EUREKA ENERGY LIMITED 
By ASX RELEASE
18 OCTOBER 2011
SIGNIFICANT INCREASE IN RESERVES ATSUGARLOAF PROJECT, TEXASUpgraded total of 6.7MMboe (2P) provides NPV of US50c a shareHighlights• Eureka’s share of 2P reserves at Sugarloaf project soars 40% to 6.7MMboe, representing an
NPV(10) of US$118.9 million or US50c per share.
• Total proved (1P) reserves (Eureka’s share) are 2.2MMbbls of oil, condensate and natural gas liquids (NGLs) and 5.5 Bcf of natural gas. This represents a reserves increase of 43% in barrels of oil equivalent since 31st December 2010 and equates to an NPV(10) of US$62.3 million.
• Total proved plus probable (2P) reserves (Eureka’s share) are 4.7 MMbbls of oil, condensate and
NGLs and 12.1 Bcf of natural gas. This represents a reserves increase of 40% in barrels of oil equivalent since 31st December 2010 and equates to an NPV(10) of US$118.9 million
• Reserve upgrade will further underpin plan to increase the number of producing wells on
Sugarloaf field from 22 currently to 276
Eureka Energy Limited (ASX: EKA) is pleased to advise that its share of the 2P reserves at its Sugarloaf oil and gas project in Texas have increased by 40 per cent to 6.7 million barrels of oil equivalent (MMboe).
The upgraded 2P estimate is equivalent to a net present value of US$118.9 million, or US50c a share. Eureka shares closed on the ASX at A$0.185 a share on October 17, 2011.
The revised figure provides more strong evidence of the extremely robust reserves at Sugarloaf and further increases the partners’ confidence in the field’s ability to host a substantial increase in the number of producing wells.
Two further wells drilled in 2011 after the effective date of the reserves report are expected to further increase Eureka’s 1P and 2P reserves position and add additional value to the Sugarloaf asset by the end of this calendar year.
The revised reserve estimate was conducted by independent consultants Netherland Sewell & Associates, Inc. (NSAI).
EUREKA ENERGY LIMITED
ABN 46 116 829 139
LEVEL 3, 3 ORD STREET
WEST PERTH WA 6005
TELEPHONE:
FAX:
+61 8 9321 9337
+61 8 6314 1557
www.eurekaenergy.com.au
Eureka Managing Director and CEO Peter Mills said the latest reserve upgrade confirms the current and
future strength of Sugarloaf.
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“Sugarloaf is already an outstanding asset for Eureka and we expect its contribution to the Company to grow even further when new operator Marathon takes over in November,” Mr Mills said. “This is expected to see additional rigs assigned to the area, resulting in further increases in reserves and production.”
Reserves EstimatesThe following table provides reserves and value estimates generated by NSAI using forecast prices and costs.
Notes:
1: Net reserves are after royalty payments.
Table 1 : Net Reserves and Value
2: NPV(10) is the net present value of future net revenue, after deductions for operating and capital expenses, production taxes and ad valorem taxes, but before Corporate income tax.
ENDS
For further information please contact:
Alex Neuling, CFO and Company Secretary +61 8 9321 9337
Key Assumptions
NSAI have used the following assumptions in their model:
• Well costs which include drilling, stimulating and producing are estimated at $7.8m for one year, and then reduced to $6.8m.
• Operating costs are assumed to be $15,000/well per month.
• The pricing forecast is provided in Table 2. Oil and NGL prices are based on NYMEX West Texas Intermediate prices and are adjusted for quality, transportation fees, and a regional price differential. Gas prices are based on NYMEX Henry Hub prices and are adjusted for energy
content, transportation fees, and a regional prices differential.
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Table 2 : Price Forecast
Abbreviations
bbl Barrel of crude oil or natural gas liquids or condensate scf Standard cubic foot of natural gas
boe Barrels of oil equivalent, determined using a ratio of 6 Mcf of natural gas to one barrel of crude oil or condensate, and a ratio of one barrel of NGL to one barrel of crude oil or condensate
M Prefix indicates thousands
MM Prefix indicates millions B Prefix indicates billions NGL Natural Gas Liquids.
Technical information contained in this report has been reviewed by Mr Peter Mills, B.Eng, SPE, Managing Director of Eureka who has had 29 years experience in petroleum engineering and has consented to the inclusion of this information in the form and context in which it appears.
Cautionary StatementsA barrel of oil equivalent (boe) conversion ratio of 6 Mcf per 1 barrel of crude oil is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. As such, boe may be misleading, particularly if used in isolation.
The evaluation of future net revenue in this release is after deduction of royalties, production taxes and ad valorem taxes, capital costs, abandonment costs, and operating expenses, but before consideration of income taxes and indirect costs such as administrative, overhead and other miscellaneous costs.
Forward-looking statements are made based on Eureka’s beliefs, estimates and opinions on the date of this release, and the Company undertakes no obligation to update forward-looking statements and if these beliefs, estimates and opinions or other circumstances should change, except as required by
applicable law.
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Eureka is an Oil & Gas exploration, development and production company listed on the Australian Securities Exchange and focused on the development of its onshore Eagle Ford Shale interests in Southern Texas, USA. Eureka participates in the Sugarloaf, Pan de Azucar and Brioche projects.
The Sugarloaf AMI comprises approximately 24,150 gross acres (approximately 1,500 net acres) and Eureka holds a 6.25% working interest (subject to 25% lease royalties). The Sugarloaf project is located in the condensate-rich window of the Eagle Ford shale and production commenced in mid-2010. 22 wells are currently on production with 2 further wells to be completed in 2011.
Eureka’s interests in Pan de Azucar are structured as a 100% Working Interest in 675 gross acres and a
9.4% working interest in a further 916 gross acres referred to as the Black Jack Springs Drilling Unit (working interests are subject to an average of 27% lease royalties). The first Black Jack Springs well commenced production in July, 2011 opening up Eureka’s second producing asset. The project is located in the Eagle Ford oil or condensate-rich fairway and the first well was spud in April 2011.
Eureka Energy also holds a 100% working interest (subject to an average of 25% lease royalties) in 4,460 acres in Burleson and Washington counties (Brioche Project). The acreage lies within the eastern liquids-rich fairway and potentially is within the gas-condensate window of the Eagle Ford shale. The Brioche Project area is located in the northeast part of the Eagle Ford trend some 70km Northeast of Pan
de Azucar acreage and about 200km Northeast of Sugarloaf.
