... Arrowsmith‐2 well is planned to commence toward the end of May. Norwest is the operator of this historic project, the first ever dedicated shale gas well to be drilled in the basin, and for that matter, Western Australia. .... Success in the Northern Perth Basin will be a Company maker....

... early indications of prospectivity should start to unveil towards the end of June after the cores are recovered and wireline logs run..

... Shale gas wells have a high initial flow rate in the early years, then tail off and would produce for around 20/25 years depending on various economic project factors prevailing at the time...

...Any development plan would be built around numerous wells being drilled and fracture stimulated to maximise production. A minimum base case of say ten wells drilled and fracture stimulated annually, going out for five years could, at this scale of operations produce circa 250Bcf gas over a 20 year life with each well producing 5Bcf (assumption based on US models and data).

Considering the potential size of the field of 3tcf from the Carynginia alone, this would be minor in the scheme of things and would justify a substantial increase to the scale of operations in the event that the concept is proven.....

The Arrowsmith‐2 well was successfully drilled in June 2011 as a proof of concept well to assess the shale gas / tight gas potential of the permit area. In order to complete this assessment, Norwest will be running a hydraulic fracture stimulation program on this well. Hydraulic fracture stimulation is a method used routinely in the oil and gas industry in both conventional and unconventional exploration programs.

However due to a third party referral of this program to the EPA, the start date for the hydraulic stimulation program of Arrowsmith‐2 has been deferred. Norwest was planning to commence the stimulation program on 1st September, however must now wait until the EPA has made a decision on whether or not to carry out an assessment of the
program. Final approval is to be provided by the Department of Mines and Petroleum (DMP), and Norwest is confident that all supporting documentation required by the DMP will demonstrate full compliance to all necessary regulations and guidelines. At this time it is unclear how long this overall process will take, however it could be three months or
more before it is concluded.