Austral Pacific Announces Second Quarter Results

              Net Revenue Up, Operating Results Turn Positive



    WELLINGTON, New Zealand, Aug. 15 /EMWNews/ -- Austral Pacific Energy

Ltd. (TSX-V: APX; NZSX: APX)



    Austral Pacific announces $2.78 million in net revenue in the second

quarter representing a 123 percent increase in net revenue over the 1st

quarter results. This was due to an increase in oil sales from 27,160

barrels in the March quarter to 35,681 barrels for the June quarter, and an

increase in oil price received by removing the oil price hedge.



    Austral Pacific chief executive Thom Jewell said, "This quarter's

results are a stepping stone for the Company. Operating results, which we

define as oil sales income against direct expenses of royalties, production

costs and G&A, are positive for the first time. Although our accounting

results show a loss for the quarter, the company has made progress toward

one of its key targets for 2008."



    Austral reported an accounting loss for the quarter of $2.529 million,

compared with a loss of $3.243 million for the same quarter in 2007. The

loss includes the final impact of oil sales hedged in 2006 at $65 per

barrel and non-cash expenses of depletion of reserves and depreciation of

production facilities. The loss was mitigated by the gain on sale of its

Papua New Guinea permits.



    The company received world oil prices (averaging some $136 per barrel)

for its June crude oil sales. The May 2008 close-out of the oil sales

contracts required Austral to borrow a further $17.8 million. However, the

increased revenue for current production adds positively to the bottom

line, and the company is no longer exposed to penalties if monthly

production volumes do not meet the previously contracted levels.



    Production from the Cheal oil field totaled 42,812 barrels for the June

quarter (Company share: 29,754 bbl). During June, average daily production

was 417 barrels, although annual maintenance and testing programs will

reduce that amount during July and August. The recently drilled A7 well has

the potential to increase production to some 650 barrels per day.



    During the second quarter, the company continued to implement its

stated 2008 program:



    -- In disposing of non-core/non producing PNG permits, the company

raised $8.5 million cash. These permit sales reflect its strategy to reduce

debt and focus its activities in New Zealand by growing the Cheal and

Greater Cheal assets, drilling the Kahili-2 well and further investigating

a technical solution to unlocking the deep gas at Cardiff;



    -- Two wells were drilled in the Cheal oil field, resulting in the

successful A7 well and a sub-commercial field extension well at the A6

location. The A7 well is expected to be on-stream by the end of August

2008;



    -- Continuing cost containment included staffing reductions, and

reducing the company's stock exchange listings from three to two leaving

one in North America and one in New Zealand, thereby significantly reducing

future compliance costs. Operating costs for the first six months of 2008

averaged $89/barrel including the cost but not the benefit of substantial

one off legal and restructuring costs.



    Mr. Jewell commented that the results at Cheal A6 and A7 will not only

add to Austral's revenue stream, but also advance its understanding of the

field size and production capability.



    "These recent results will guide our production enhancement studies,

which aim to increase the recovery from the existing wells. It will also

help to target additional reserves by identifying the best drilling

opportunities in the company's prospect inventory on adjacent permits," he

said.



    "Austral's return to the fundamentals is showing results. The company

will continue its approach throughout 2008 with the intention of building

its production, likely through both enhanced recovery techniques and

additional drilling in late 2008 and early 2009. We are still facing a

working capital deficit of some $15 million but we believe that with nearly

two million boe (barrels of oil equivalent) of 2P reserves, a reduced cost

structure and some excellent near term exploration prospects, we should be

able to refinance this deficit by year end.



    In other corporate news, the company has granted a total of 80,000

stock incentive options at an exercise price of $0.49 to Rhys Humphries --

New Plymouth Operations Manager and to Jeanette Watson -- Corporate

Secretary, All such options are granted for a five-year term, vesting in

three equal amounts over 18 months.






    Web site: http://www.austral-pacific.com

    Email: [email protected]

    Phone: Thom Jewell, CEO +64 (4) 495 0880 or Brad Holmes +1 (713) 304 6962

    Neither the TSX-V nor the NZSX have approved or disapproved the

contents hereof. This release includes certain statements that may be

deemed to be "forward-looking statements" within the meaning of applicable

legislation. Other than statements of historical fact, all statements in

this release addressing future production, reserve potential, exploration

and development activities and other contingencies are forward-looking

statements. Although management believes the expectations expressed in such

forward-looking statements are based on reasonable assumptions, such

statements are not guarantees of future performance, and actual results or

developments may differ materially from those in the forward-looking

statements, due to factors such as market prices, exploration and

development successes, continued availability of capital and financing, and

general economic, market, political or business conditions. Please see our

public filings at http://www.sedar.com and

http://www.sec.gov/edgar/searchedgar/webusers.htm for further information.