QUARTERLY REPORT FOR THE PERIOD ENDING 31 MARCH 2006

HIGHLIGHTS FOR THE QUARTER

Exploration Activity

1. Commencement of drilling in early January 2006 of Eagle North-1 appraisal well on California Eagle Oil Pool Development Project, with potential to contain up to 34 million barrels of oil and 58 billion cubic feet of gas. Victoria Petroleum has a 20% interest on success in Eagle North-1 drilling and completion for production.
2. Commencement in April 2006 of exploration drilling program of five wells in South Australian Cooper Basin permits. Of the five exploration wells, Tomcat-1 is planned to test a target with up to 16 million barrel oil potential, if oil is present, up dip to well with "oil show" of 785 barrels of oil per day.
3. Within southern Cooper Basin permit PEL 115, the interpreted presence of a 23 million barrel oil-in-place Murta resource on the Mirage - Lightning - Jindivik structure interpreted from 3D seismic data, to be further tested by the April 2006 Jindivik-1 exploration well.
4. Commencement of drilling in May 2006 by White Sands Petroleum of 2700 metre exploration well on Reids Dome in Petroleum Lease 231 targeting up to 309 billion cubic feet of gas potential, if gas is present. Victoria Petroleum has a 40% free carried interest through the drilling, testing and completion of the well.
5. Commencement of drilling in June 2006 by White Sands Petroleum of horizontal appraisal well in gas bearing Triassic sands of the North Cherwondah well, Petroleum Lease 171, targeting up to 125 billion cubic feet of gas. Victoria Petroleum has an 8% free carried interest through the drilling and completion of the well.
6. Eight exploration and appraisal wells planned over the next four months with a target potential in excess of 50 million barrels of oil and up to 425 billion cubic feet of gas, if oil and gas is present, as part of 12 well exploration program over next eight months as per the attached drilling schedule.

Development and Production Activity

7. Total gross oil production over the quarter from Victoria Petroleum's Australian oilfields was 456,671 barrels with net 34,925 barrels of oil to Victoria Petroleum at an average of 388 barrels of oil per day, an 8% increase in net oil production over the previous quarter.
8. Higher oil and gas prices during the quarter provided oil and gas sales revenue of $4.1 million, an increase of 246% over the previous quarter.
9. Oil production at Mirage and Ventura Oil Fields increased to combined gross production of 410 barrels of oil per day from estimated recoverable reserves of up to 4.6 million barrels of oil.
10. Successful completion of 3 development wells on Mirage Oil Field during the quarter with plan to increase total Mirage Oil Field oil production up to estimated gross 1000 barrels of oil per day in 2006, following mid 2006 fracture stimulation.
11. Continuation of Jingemia Oil Field production at rates of up to 5,478 barrels of oil per day (247 barrels of oil per day net to Victoria) in first quarter 2006 by operator Origin Energy. Total gross oil production during quarter of 422,121 barrels at an average of 4,690 barrels of oil per day (234 barrels of oil per day net to Victoria).
12. Up to four development wells planned in Victoria Petroleum's Australian and USA oil and gas production properties over the next eight months as per the attached drilling schedule.
13. Planned development drilling program on Flour Bluff Gas Field, Texas with aim with continuing development success to increase gas production within 12 months of up to 20 million cubic feet per day.
14. Development drilling success in 2005 in the Flour Bluff Gas Field, Texas increased proved probable, possible and potential gas reserves to 210 billion cubic feet of gas equivalent.
15. It is anticipated that by the end of calendar 2006 that with successful development drilling, the current and planned future Victoria Petroleum net oil and gas production will generate net cash flow estimated at $8 million for the year (calculated at US$55/ bbl and US$8.50/mcf), an increase over calendar 2004 net cash flow from oil and gas sales of $4.4 million.
16. Victoria Petroleum development and production activities in Australia and USA are being carried out against a background of historical high oil prices in the range of A$70-A$80 per barrel.

Other Assets

17. Victoria Petroleum N.L. has an 8.8% interest in Samson Oil & Gas Limited which through its 93.4% shareholding in Kestrel Energy, Inc. has recoverable proved reserves attributable to Samson of 23.5 billion cubic feet of gas equivalent with a 10% net present value of A$90.4 million as reported by Samson Oil & Gas Limited.
18. Cash and current investments as at March 31, 2006 of $9.3 million to fund planned exploration and development drilling activities, as follows:

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