Chelsea Oil & Gas Ltd. provided the following update on industry drilling activity adjacent to the Company's ATP 582 in the South Georgina Basin in Queensland and the Northern Territory, Australia. In Queensland, Central Petroleum Limited and Total S. A recently announced the spudding of Whiteley-1, the first of a multi well unconventional gas exploration drilling program operated by Central, in partnership with international energy company Total. Whiteley-1 is approximately 3-5 kilometers from the eastern boundary of ATP 582 and will be a test of the thicker Lower Arthur Creek sequence within the Toko Syncline, considered by Chelsea to be the most hydrocarbon-prospective area of the South Georgina Basin.

The zone is planned to be extensively logged to evaluate its hydrocarbon potential, as well as fully cored to assess reservoir properties and gas desorption. A second well to follow Whiteley-1 was also announced, being Gaudi-1, anticipated to spud mid-September and also testing the thicker Lower Arthur Creek sequence within the Toko Syncline. Central is expected to announce completion and stimulation plans in due course following completion of the drilling and coring program.

Given the proximity of these wells, results from operations should provide an excellent indication of the potential of Chelsea's approximately one million acres of prospective Lower Arthur Creek strata, also within the Toko Syncline area. In addition to the commencement of operations by Central /Total, PetroFrontier Corp. recently announced the completion by Statoil ASA of the drilling of their optional fifth and final vertical test well to be drilled as part of their 2014 work plan on their permits immediately adjacent to ATP 582 in the Northern Territory.

PetroFrontier further announced that the OzAlpha-1 and OzBeta-1 wells have been selected for completion and testing as they are reported to provide the best opportunities encountered in their five wells. These two wells, while in the Northern Territory, are the closest (approximately 50 to 60 kilometers) to ATP 582 of the five wells drilled, and are closest to the Toko Syncline wherein the prospective horizon greatly thickens and is thought by Chelsea to be the most prospective part of the South Georgina Basin.