HYDROCARBON DYNAMICS LIMITED — Capital/Financing Update 2010

Dec 19, 2010

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20 December 2010 Deshotels 20-H No.1 Flow Test Update

A s a result of a pre-C h ristmas in c rease in t h e demand for oil field services, t he contrac t or which has b een engaged to acidi z e the perf o rated inter v als in the horizontal leg of the D eshotels 2 0 -H No.1 has b een unabl e to attend t o the job a s schedule d . It is no w expected that the ac i dizing will b e carried o ut a fter Christ m as. Flow testing of th e well will f o llow the acidizing.

A s discussed in previo u s announcements, it i s expected that the D e shotels 20 - H No.1 well will prima r ily p roduce oil. However, it is also e xpected that commer c ial quantities of natu r al gas will be produc e d. T renching a nd laying of the flo w line fro m the well to the nat u ral gas s a les line, a distance of a pproximat e ly 4 miles, i s underwa y .

P ryme has a 40% working interest (30% net r e venue interest (NRI)) in this well.

Project Description

T he Deshot e ls 20-H N o .1 well, in P ryme’s Turner Bayou Chalk proj e ct in the North Bayou Jack Field, is t h e first deep well to b e drilled wit h in the Tur n er Bayou 3 D seismic s urvey. Th e well has b een drilled to a depth of 1 6 ,400 feet (5,000 metr e s) verticall y with a 3,755 feet (1,144 metre) h orizontal l e g through the A ustin Cha l k formatio n which is predomin a ntly oil bearing in this region. The well location w as c onfirmed u sing high r esolution 3 D seismic data from a survey c arried out in 2007 and data fr o m s urrounding well bores.

T urner Bay o u is one of Pryme’s hi g h value pr o jects. It is located in A voyelles P arish, Loui s iana. Pry m e h as a 40% interest in t h e Turner B ayou Chal k project ar e a, which i s contained within the T urner Bay o u 3 D seismic survey, and a 52% i n terest in t h e balance of Turner Bayou. T h e Turner B ayou proj e ct c omprises a pproximat e ly 80 squa r e miles (5 0 ,000 acres) which ha v e been im a ged by a p roprietary 3 D s eismic sur v ey. Primary targets a re contain e d within si x prospecti v e formatio n s ranging in depth fr o m t h e Frio for m ation at 3, 0 00 feet, to the Tuscal o osa forma t ion at 18,0 0 0 feet.

F or further in f ormation pl e ase contact :

Justin Pettett	Ryan Messer
Managing Director	Chief Operating Officer
Pryme Oil and Gas Limited	Pryme Oil and Gas Limited
Telephone: +61 7 3371 1103	Telephone: +1 713 401 9806
Website: www.prymeoilandgas.com	ASX Code: PYMOTCQX Code: POGLY

P ryme Oil a n d Gas Limi t ed is an Au s tralian oil and natural g as produce r and explor e r with inter e sts in the G ulf S tates of the U.S. The c ompany ha s oil and ga s exploration projects fo c used on Lo u isiana, the fifth-largest o il- p roducing st a te in the U. S . These p r ojects are f u nded in pa r t by existin g cash flow. Pryme’s bo a rd of direct o rs a nd management team has over 1 0 0 years o f energy in d ustry exper i ence and h as uniquel y focused lo c al k nowledge, u nderscored b y the prov e n track reco r ds of its managers and d irectors. D i rectors of the company a re G eorge Lloy d (Non-Exec u tive Chairm a n), Justin Pettett (Mana g ing Directo r ) and Ryan M esser (Executive Direc t or) a nd Greg Sh o rt (Non-Executive Direc t or).

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