Mosaic progresses Underground Gas Storage discussions May 26, 2009

Mosaic Oil NL (ASX: MOS) is in discussions with a number of prospective customers for the utilisation of underground gas storage at the Silver Springs-Renlim gas field.

Commercial negotiations are being progressed following technical work indicating that up to 75 Billion Cubic Feet (BCF) can be stored in the nearly depleted Silver Springs-Renlim gas field.

The Company has been reviewing the underground gas storage opportunity since early 2008, and has identified this as a high value project which could realise a new and significant revenue stream for the company as early as 1Q 2011.

The field could provide suitable storage for ramp-up gas for LNG projects, on-going gas production management, as well as meeting seasonal gas demand and peaking supply for electricity generation. Storage would also provide security in the event of supply interruptions.

Mosaic Oil owns 100% of the near depleted Silver Springs-Renlim field, which now only producesfrom one well. The Silver Springs-Renlim field was discovered in 1974 and has produced over 90 BCF of gas. The field is located near the Mosaic Oil owned and operated Silver Springs Plant, and approximately 100km south of the Wallumbilla Gas Hub, the main gas hub in Queensland.

Click here to view the full announcement.

For further information, please contact:

Mosaic Oil: Tim Petersen – Acting Chief Executive Officer on 02 9247 9324
Media: Bill Kemmery – Fortbridge on (02) 9331 0655, mob 0400 122 449, email bill.kemmery@fortbridge.com