Historical

Quarterly Report

8:30am, 26 Jan 2012 | QUARTER

QUARTERLY ACTIVITIES REPORT
DECEMBER 2011

During the December quarter the Company announced a proposed capital return of 5 cents per share, subject to shareholder approval. In order that shareholders may be fully informed at the required Extraordinary General Meeting when considering Directors’ recommendation, a Class Ruling has been requested from the Australian Tax Office to confirm robust taxation advice received by PPP. The Extraordinary General Meeting date will be set once the outcome of the ATO Class Ruling has been received by PPP. PPP’s cash at bank position at the end of the quarter was approximately A$95m equivalent, or close to 16 cents per share.

Work continues on maturing potential drilling candidates in PPP’s Joint Ventures in New Zealand, Vietnam and the Joint Petroleum Development Area between Timor Leste and Australia, and through evaluation of new ventures. Assessment of the commercial potential of the CRD oil and gas/condensate discovery in Vietnam is also ongoing.

Further details on activities, including the Tui Area Fields are summarised below.

New Zealand
Tui Area Oil Project (PMP 38158) Taranaki Basin (PPP interest 10%)

Production from the Tui Area oil fields totaled 518,549 barrels (net PPP 51,855) for the December quarter, averaging 5636 barrels a day. Production was as planned, but was marginally lower than for the September quarter due to a scheduled shutdown being carried out from 23rd November to 6th December. The shutdown was successfully completed with production back on line at 6500 bopd on 6th December.

Cumulative field production to the end of December 2011 was 32.16 million barrels (PPP share 3.2 million barrels). PPP’s operating revenue from Tui during the quarter was US$ 3,970,000 (unaudited).

AWE has continued evaluation of both the Tui area infill development and near field exploration potential. This work is planned for further Joint Venture review in Q1 2012 with the aim of determining whether any of the identified opportunities meet the criteria for selection as firm drilling candidates.

As from 1st January the Tui crude annual term sale contract will be held by BP based on the results of a competitive tender for 2012 sales. Tui crude is priced at a premium to Dated Brent crude.

Australia
WA-246-P (PPP interest 10%)

Retention Leases were awarded over the Corvus gas discovery (WA-45-R) and the Tusk oil discovery (WA-46-R) on 23rd November 2011, for a period of 5 years. The permit WA-246-P ceased effective the same date.

WA-254-P (PPP interest 3.55% average)

An application for a retention lease over the Sage oil discovery is still pending.

TL/2 (PPP interest 23.17%)

Apache continues to review the remaining potential within the license and has proposed a 3D Ocean Bottom Cable (OBC) seismic survey which will cover both the shallow water Airlie Island and Taunton Reef areas (extending into TP/7) with the aim of improving structural imaging. Planning is underway and the survey is expected to start Q1 2013.

TP/7 (PPP interest 4.16%)

Apache, on behalf of the JV has submitted a request for a 12 month suspension and extension of the permit to enable the mandatory 50% relinquishment area to be selected prior to progressing a request for renewal.

Vietnam
Block 07/03 (PPP interest 5%)

The Subsequent (Second) Exploration Period (SEP) of the PSC was entered on 1st December 2011 for a period of two years. The SEP has a remaining commitment of one exploration well.

Assessment of the potential for a commercial development of the CRD oil and gas/condensate discovery has continued including whether additional appraisal drilling is required and a further progress review is expected around end Q1 2012.

In addition to the CRD discovery, block 07/03 also contains several large undrilled exploration prospects which are being matured with the aim of establishing an exploration drilling program, subject to the approval of JV participants.

Timor-Leste
JPDA 06-103 (PPP interest 15%)

The Operator, Oilex (JPDA 06-103) Ltd, has continued work on maturing a drilling candidate for the third commitment well with both the final Tutuala and Bazartete 3D seismic data sets now available. The results of the Tutuala seismic interpretation are promising and the Bazartete interpretation is also underway.

Preparations for the drilling of the next well are in-hand. However, due to rig availability drilling has been postponed and is now likely to be during Q2-Q3 2012. To accommodate this delay the Operator has requested and been granted an additional 12 month extension to the current contract term which will now conclude on 15th January 2013. A condition of the extension was an additional 25% relinquishment which can be easily accommodated given the downgrading of the southern part of the contract area by disappointing drilling results of the first two commitment wells.

Financial Highlights (unaudited)

Assets include: Cash held* A$95.0 m
Receivables for oil sales (gross) Nil
Tui oil inventory (WMP share) 53,531 barrels

Liabilities include: Accrued royalty taxes A$1.2m

PPP is free of any debt.
*Cash at 31 December 2011 excludes cash deposited A$3,171,000 in support of the Tui FPSO lease contract.

Production & Reserves
Tui Area Fields (PPP 10%) Year ended 30/06/2011
MMbbls Year to date 31/12/2011
MMbbls
PPP total net production 0.28 0.12
PPP remaining net reserves 0.95 0.83

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Notes:
1. References to PPP, and the Company, are to be read as inclusive of the subsidiary companies within the consolidated PPP group.
2. Where appropriate activities and events occurring after 30 September 2011 have been recorded in this report.
3. Except where otherwise stated, dollar amounts are in AUD currency
4. Remaining reserves are subject to an ongoing review and exclude 0.05 MMbbls net to PPP which have been allocated as potential fuel oil.

For further information please contact:

Tom Prudence
Chief Executive Officer
Pan Pacific Petroleum NL
Telephone: + 61 2 9957 2177
www.panpacpetroleum.com.au