Cue Energy: Mahakam Hilir PSC operations update

(February 8, 2012)--Cue Energy Resources Ltd is pleased to provide the following update on the drilling status of Naga Utara-1. The well is located within the Mahakam Hilir PSC in the Kutei Basin, Indonesia. The well operator is SPC Mahakam Hilir PTE Ltd (SPC).

It is proposed to drill to a total depth of 5500 ft Measured Depth (MD) and is expected to take approximately 10 more days to complete including well testing if required.

As of 8th February 2012 the well is at 4843 ft MD. The 9 5/8 inch casing was set in the previous section down to 3003 ft and the 8 1/2 inch hole is currently being drilled. Multiple hydrocarbon shows were encountered below 3040 feet and a high pressure gas flow occurred at the current depth. Operator is currently increasing the mud weight and preparing to evaluate using wireline logging from the last casing point to current TD.

Forthcoming operations will be reassessed after logging is completed and a further update will be provided.

The participants and their respective interests in the PSC are:
SPC Mahakam Hilir Pte Ltd (Operator) 60%
Cue Mahakam Hilir Pty Ltd 40%. (end of release)