Australis Oil & Gas Limited provided the following update on the company's development activities in the Tuscaloosa Marine Shale (TMS), onshore Mississippi. As announced on 15 November 2018, the Stewart 30H-1 was drilled and cased in a northerly direction from the surface pad to a depth of 19,424 ft in 25 days, ahead of the planned 32-day schedule. The Nabors B-14 drilling rig then skidded to the Bergold 29H-2 on the same surface location where the intermediate hole section had already been drilled and the 9 5/8" casing shoe was cemented at a depth of 11,670ft. Initial drilling operations on the lateral section of the Bergold 29H-2 progressed according to plan, with the well successfully steered into the target zone and the horizontal section drilled to south and to a depth of 14,524ft. However, ongoing operations have encountered difficulties related to the formations above the target zone but below the casing shoe. Australis believes that the formation characteristics encountered whilst drilling this section of the Bergold 29H-2 are not consistent with the substantial database the company holds and are therefore unique to this area. Australis has successfully implemented several planned contingencies to recover a stuck drilling assembly and maintain the wellbore integrity, however the decision has now been made to complete the existing wellbore, with a horizontal length of approximately 2,000ft, rather than attempt to drill further. By undertaking this cautious and prudent approach Australis will obtain a valid productivity test of the reservoir in this area, secure the production unit leases and add to the company revenue stream, whilst preserving capital. Having demonstrated the ability to execute within budget and schedule on the Stewart 30H-1, the company believes that available capital in this phase of activities is best deployed on the next wells in the schedule rather than seeking to address unique localised issues on the Bergold 29H-2 to achieve the planned wellbore. The well operations on the Bergold 29H-2 are scheduled to be completed on 30 November and the rig will then move to the Taylor/Williams pad. The frac crew is planned to be mobilised to the Stewart/Bergold pad in early December, with stimulation operations expected to commence during December 2018. To improve efficiency and reduce costs, Australis continues to use a smaller rig to drill the top-hole sections before the main rig mobilises to each pad location. The Monclua #3 spudder rig has completed the top-hole sections of the Williams 26H-2 and Taylor 27H-1 wells, with a 13 3/8" surface casing set in each well at a depth of approximately 3,200 ft. The spudder rig has de-mobilised and the Taylor/Williams surface pad is ready and prepared for the main rig to commence drilling in early December 2018. Despite the delays on the Bergold 29H-2 well, the Company expects the production results from the Stewart 30H-1 and Bergold 29H-2 as well as the drilling of the Williams 26H-2 and Taylor 27H-1 to be ahead of the previously advised schedule and provides the following update.