Adelaide Energy Limited (ASX:ADE) Otway Petroleum Project Testing Program Update

Adelaide, May 26, 2010 AEST (ABN Newswire) - The Otway Petroleum Project is Adelaide Energy Ltd's (ASX:ADE) 100% owned suite of integrated production, development and exploration oil and gas assets, which are located in the South Australian section of the onshore Otway Basin.

ADE has recently drilled and completed a number of wells as part of its Otway Petroleum Project. This report provides an update on the ongoing testing program on those wells. The Company expects the majority of the testing work to be completed over the next two weeks. Significant events will be reported as they arise.

The Otway Petroleum Project (100% ADE) comprises:

a. PEL 255 : contains the Jacaranda Ridge 2 discovery + 5 extra targets

b. The Katnook Gas Assets consisting of:

- The Katnook Gas Processing Plant and associated infrastructure

- The Ladbroke Grove Gas Processing Plant and associated infrastructure

- Petroleum Retention Licences 1 (Wynn) & 2 (Limestone Ridge)

- Petroleum Production Licences 62, 168 & 202

- Existing gas pipelines to the Gas Plants from wells in the PPL's

- 13 Producing/shut in gas/gas liquids wells

c. PEL's 494 and 496 - 2 exploration licences awarded to ADE on 24 March 2009

d. PRL 13 (30% ADE) - Killanoola Prospect (soon to be 80% ADE)

TESTING PROGRAM REPORT TO 0600 hrs 24 May 2010

----------------------------------------------------------------------------ITEM                    Detail----------------------------------------------------------------------------Patrick-1    - Testing of Patrick-1 to date has focused on perforating                the Jacaranda Ridge Sandstone             - Gas and condensate have flowed to surface from this                reservoir - at a rate of ~300,000 scfpd + 20 bbls of                condensate             - Programs to increase these flow rates (through, e.g.,                re-perforations, acidification, etc) will be applied                over the next few weeks             - The Sawpit Sandstone is yet to be perforated             - Data obtained in the testing program to date will enhance                reservoir understanding and hence reserves bookings, further                drilling opportunities, stimulation optimization plans, etc----------------------------------------------------------------------------Hollick-1    - Perforations in the deeper Sawpit Sandstone have not as yet                produced hydrocarbon flows             - A program of perforating the entire Jacaranda Ridge Sandstone               is ongoing as at the date of this Report----------------------------------------------------------------------------Wynn-2      - Three separate zones in Wynn-2 have been identified for               perforation and these will be approached from the bottom up               over the next week----------------------------------------------------------------------------Safety issues      - None----------------------------------------------------------------------------Environmental issues      - None----------------------------------------------------------------------------

Contact

Carl Dorsch Managing Director Adelaide Energy Limited Mob:+61-0400-508-088 Email: c.dorsch@adelaideenergy.com.au Neil Young Chief Commercial Officer Adelaide Energy Limited Mob: +61-0417-850-245 Email: neil.young@adelaideenergy.com.au