Cue Energy: Mahakam Hilir PSC operations update

(March 09, 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 onshore Kutei Basin, Indonesia. The well operator is SPC Mahakam Hilir PTE Ltd (SPC).

As of the 9th March 2012 the sidetrack has been drilled in a 6 inch hole to 5066 feet measured depth (MD).

The high pressure gas zone seen in the original hole was again encountered from 4825 feet MD to 4880 feet MD. An additional gas bearing sandstone was encountered between 4975 feet MD to 5040 feet MD.

Due to high pressure gas influx from the lower sandstone interval and the rig equipment pressure rating now being close to the formation pressure encountered, the operator has decided to call total depth of the well (TD). The interval will be evaluated with wire-line logs.

The forward plan is to design an appraisal well to be drilled with appropriate high pressure rig equipment.

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)