Drillsearch Energy Limited (ASX:DLS) Quarterly Report For The Period Ending 30 September 2009

Sydney, Nov 2, 2009 AEST (ABN Newswire) - Drillsearch Energy Limited (ASX:DLS)PNK:DRLLF) cash balance as at 30 September 2009 was A$13.28 million. Actual cash payments for exploration, appraisal and development expenditure for the September Quarter were A$2.60 million (in contrast to the June Quarter of A$1.08 million). Cash reserves were increased by A$9.58 million as a result of an equity placement and will be further increased at the completion of the current share purchase plan offer.

Drillsearch has adequate cash resources to meet its funding requirements for all of its existing capital commitments. Further details of exploration and development initiatives are outlined in this quarterly report.

Oil price

Drillsearch's Australian operations realised a September quarterly average oil price of A$81.69/bbl compared with A$72.87/bbl last Quarter. For the month of September 2009, the average realised oil price was A$71.79/bbl compared with A$91.10/bbl in June 2009.

Corporate

Beach Takeover Bid

The company successfully defended the hostile takeover bid launched by Beach Petroleum on 5 May 2009. Beach was only able to secure a 22.8% shareholding in the company and following the unsuccessful bid, Beach has reduced its interest to 10.5% as at 27 October 2009.

Board Renewal

The Board renewal which commenced in May 2009 continued with: the appointment of Brad Lingo as the new Managing Director; the appointment of Jim McKerlie as Chairman; the resignation of Peter Wicks as non-executive director and the appointment of two independent non-executive directors, Ross Wecker and Fiona Robertson, to the Drillsearch Board.

Capital Raising

On 18 September 2009, the company successfully completed an equity placement raising A$9.58 million at A$0.05 per share to new institutional and sophisticated investors. In parallel with the equity placement, the company also announced a share purchase plan offering shares to existing shareholders at A$0.05 per share (the same price as the equity placement). The share purchase plan is scheduled to close on 30 October 2009. The funds raised in the equity placement and the share purchase plan are principally targeted at funding the initial development of the Chiton Oil Discovery and the Western Cooper Gas and Liquids Project.

Portfolio Rationalisation

A thorough portfolio review is being conducted and several non-core assets have already been identified. The company has engaged RFC Corporate Finance and RISC Pty Ltd to assist the company in further evaluating these assets and assisting it with sale and/or farmout process for these assets. The initial focus of the review has been on the company's non-Cooper Basin assets and the preliminary indications are that several of the assets are likely to be attractive to other parties either on a sale or farmout basis.

Canada

The company is addressing several issues relating to its 79.5% owned TSXV-listed subsidiary, Circumpacific Energy Corporation (CVE:CER). The company has been required to requisition a shareholders' meeting to vote on the election of new directors nominated by the company.

For the complete Drillsearch Quarterly Report for the period ending 30 September 2009, please click the link below:

http://www.abnnewswire.net/media/en/docs/61677-ASX-DLS-571012.pdf

Contact

Brad Lingo Managing Director Tel: +61-2-9241-4440