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Multiple Potential Gas Pay Zones Encountered at ZJS5 Well

Source: www.gulfoilandgas.com 11/28/2012, Location: Asia

Leyshon Resources has announced that its wholly owned subsidiary Pacific Asia Petroleum Limited (PAPL) has completed the drilling and wire line logging of the ZJS5 well. The well was drilled without safety incident by Great Wall drilling Company to total a depth of 2,155 meters, then wire line logged and side wall core samples taken by contractor China Oilfield Services Limited.

The analysis of the logs and samples is ongoing however initial results have indicated that about 56.4 metres pay intervals have been encountered. In particular, around 30.8 metres of the 56.4 metres have exhibited relative high porosity measurements which indicate that these zones could have the potential to flow gas at commercial rates. Following the open hole logging program, a production casing string has been installed which will allow multiple opportunities to conduct flow tests on the potential pay zones. Management expects to conclude testing the first of the potential pay zones by the end of the year.

The second well in the program, ZJS6, is expected to spud shortly with well completion scheduled towards the end of the year. Both wells are located within approx. 10 kms of a tie-in point on the recently commissioned Lin-Lin pipeline which supplies the growing demand in Shanxi Province where well head contracts have recently been struck in the US$ 6 - 7.5 per mscf range.

PAPL has a 100% interest in the exploration phase of the Production Sharing Contract (PSC) with PetroChina, which has the right to buy back a 40% interest at the development stage.

The Company has A$ 47 million in cash and 249 million ordinary shares on issue (approximately A$ 19 cents per share and 12 pence per share). It has recently purchased 1.9 million shares at an average price of A$17 cents per share and has a further 17 million shares available to be purchased in the current on-market share buy-back up to September 2013. The cash position does not take into account interest due or liabilities for the first well.

Managing Director Paul Atherley commented:

'Frank Fu and his team have celebrated joining Leyshon by continuing their remarkable recent drilling success in the region with extremely encouraging logging results from the first well. We are very much looking forward to the flow test results on the multiple prospective pay zones over the next few weeks. The Ordos Basin is the beating heart of Central China, the world's fastest growing major economy and is quite simply one of the best places in the world to be discovering gas right now. Any commercial gas discovery at Zijinshan will be hooked into one of the nearby pipelines and sold into one of the world's fastest growing markets for gas.'

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