QUARTERLY REPORT FOR THE PERIOD ENDING 31 MARCH 2008

HIGHLIGHTS FOR THE QUARTER

Entry of Queensland Gas Company Limited (QGC) and Odin Energy Limited (ODN) onto Victoria Petroleum N.L. (VPE) share register as substantial shareholders. Presence of QGC as new VPE shareholder is significant as VPE is now aligned with Australian's largest pure Coal Seam Gas (CSG) company ($3.8 billion market capital) in development of Vicpet CSG assets.

Continuation of focussed growth strategy on the two key Victoria Petroleum (Vicpet: VPE) projects: the Cooper Basin Oil projects in South Australia and Queensland and the Surat Basin Queensland CSG interests.

In 2008, within the Cooper Basin interests of VPE, 14 wells, primarily exploration, are planned to be drilled, with up to 16 coal seam gas wells to be drilled in VPE's Queensland CSG interests, to prove an initial certifiable gross recoverable gas reserve of up to 250 billion cubic feet of gas. This will result in an active drilling program of up to 30 wells through 2008 as per the attached "VPE Planned 2008 Drill Schedule".

Exploration Activity - Australia and USA

Cooper Basin, South Australia / North Perth Basin, Western Australia

1. Partners in a fourteen well exploration program planned over next twelve months in South Australian and Queensland Cooper Basin where Victoria Petroleum (VPE) holds major gross and net acreage exploration area with average 30% interest in 14 permits.
2. Wirraway and Growler oil discoveries providing further confirmation of a possible significant "Jurassic oil fairway" in western portion of PEL 104 and PEL 111. The Western Margin Oil Project covers up to 1,200 square kms with potential with further exploration success to contain a resource of up to 100 million barrels of oil in place, if oil is present. VPE is the project operator. (VPE - 40%).
3. Planned commencement of 3 well exploration drilling program in third quarter 2008 surrounding the Wirraway and Growler Oil Fields to look for additional oil fields in this part of the western Jurassic Oil trend.
4. Tigershark, Tigercat and Meteor exploration are the three wells planned to be drilled with Tigershark adjacent and to the west of the Wirraway-1 oil discovery, targeting a potential recoverable oil resource of up to 5 million barrels, if oil is present. (VPE - 40%).
5. Some 32 prospects and leads have been mapped in the Western Margin Oil Project with seven drillable prospects identified with unrisked P10 recoverable resource of 21 million barrels of oil in the Birkhead formation, if oil is present. (VPE - 40%).
6. Commencement of drilling southwest Queensland Cooper Basin permit ATP 752P by Santos (new operator) of Cuisinier-1, the first exploration well of a 7 well drilling and seismic exploration program with total estimated expenditure of $18.5 million. Cuisinier-1, targeting a possible 2 million barrels of oil, if oil is present, is the first well of an initial two well drilling program in the Barta block, with Hudson-1 to immediately follow. The close proximity of the producing Santos operated Jurassic and Triassic Cook Oil Field to the east of the Cuisinier and Hudson prospects provides encouragement for the presence of oil in these prospects. Two future wells planned for mid 2008 in Wompi block. (VPE - 40%).
7. In the South Australian Cooper Basin permit PEL 115, Vicpet is currently in farmin discussions with interested parties with the aim, if a farmin is concluded, to provide VPE with a free carried 25% interest through drilling of up to 5 wells, commencing in the third quarter of 2008. (VPE - 100%).
8. The exploration well Freshwater Point-1 is planned to be drilled in May 2008 to test a prospect with the potential to contain up to 20 million barrels of oil equivalent in the High Cliff Sandstone, the producing horizon in the Cliff Head Oil Field, 20 kilometres to the northwest. (VPE - 5%)

Surat Basin Coal Seam Gas Interests, Queensland

9. The potential gross Coal Seam Gas (CSG) resource in four permits in Surat Basin, Queensland could be as high as 2 trillion cubic feet with potential net resource to Vicpet in excess of 500 billion cubic feet of recoverable gas.
10. The first three exploration wells of the Don Juan CSG Joint Venture located north of the town of Roma, have been cased as future pilot wells by operator Bow Energy with initial pump tests planned for the coming quarter. The first well, Taringa South-1 flowed methane gas to surface at a rate of 370,000 cubic feet per day. (VPE - 45%).
11. The Don Juan CSG Project is immediately adjacent to the Sunshine Gas Lacerta CSG Project, which has a reported CSG reserve of up to 1.1 trillion cubic feet of gas (3P).
12. Bow Energy N.L. as operator plans to drill up to a further 10 CSG wells by the end third quarter 2008 with the aim of proving by late 2008 an initial certifiable gross recoverable CSG reserve of up to 200 billion cubic feet of gas. (VPE - 45%).
13. In Petroleum Lease 171, coal seam gas core holes Paradise Downs 1 and 2 were cored to depths of 492 and 502 metres respectively, by the operator Roma Petroleum N.L. The wells are located near a well which flowed gas drilled some years ago by a coal company. Preliminary results from the desorption tests indicate gas contents of from 4 to 5.5 cubic metres per tonne of coal below 250 metres. Analyses show a 98 to plus 99% methane content. A further program to assess the coal seam gas resources in Petroleum Lease 171 is being planned.
14. Six CSG wells are planned to be drilled in 2008 in the CSG permit interest held by Vicpet in ATP 574P, a joint venture operated by Queensland Gas Company. The aim of this drilling is to prove up an initial certifiable gross recoverable CSG reserve of up to 50 billion cubic feet by the end of 2008. The CSG coals in the permit are interpreted to have a potential CSG resource in place of up to 1.4 trillion cubic feet of gas. (VPE - 30%).

USA

12. 15. Planning for future exploration and development drilling in VPE's USA properties is continuing to maintain the significant proved, probable and possible oil and gas potential for the industry party that purchases VPE USA Inc.

Development and Production Activity - Australia

16. Total gross oil production from the Australian operations over the quarter estimated at 139,501 barrels of oil at an average production rate of 1,533 barrels of oil per day (bopd). Net VPE oil production for the quarter was 12,210 barrels of oil at an average production rate of 134 bopd. Increased oil production is anticipated next quarter as the Growler Oil Field only commenced production in the latter part of March 2008.
17. During the quarter estimated oil and gas net cash flow was $1.14 million on gross oil and gas sales of $1.62 million.
18. The Mirage and Ventura oil fields in PEL 115, South Australian Cooper Basin produced during the quarter 12,694 barrels of oil at an average combined gross rate of 140 bopd, with net production to VPE of 56 bopd. Current Proved and Probable (2P) recoverable reserves for the fields are estimated at 1.59 million barrels. (VPE - 40%).
19. Commencement of the Growler Oil Field Extended Production Test from the Growler-1 and Growler -2 wells in mid March 2008 with initial gross production on pump at the end of the quarter of 210 bopd. Further development wells drilled on the Growler Oil Field in the third quarter 2008 could see field gross production rates of up to 500 bopd by end 2008. (VPE - 40%).
20. With the Growler Oil Field now on stream, at the end of the quarter, gross oil production for VPE's Cooper Basin oil fields was 350 bopd, with 140 bopd net to VPE, against a background of a Tapis oil price for Mirage/Growler crude oil of around US$110/bbl.
21. The Jingemia Oil Field in the North Perth Basin produced during the quarter 124,545 barrels of oil at an average gross rate of 1,369 bopd, with VPE net of 68 bopd. (VPE - 5%)
22. Total Texas Gulf Coast gross production of 4 million cubic feet per day equivalent from the Flour Bluff Gas Field onshore Gulf Coast, and the Margarita Gas Project wells. (VPE 12.5 - 20%).
23. It is anticipated that by the end of calendar 2008 that with successful development drilling from existing oil discoveries in the Cooper Basin of South Australia, the current and planned future Victoria Petroleum net oil and gas production will generate net cash flow estimated at up to $5 million for the year.

Other Assets & Corporate Activity

24. Recognition of undervalued future potential of VPE Queensland CSG and Cooper Basin assets by entry onto Victoria Petroleum N.L. (VPE) share register as substantial shareholders of Queensland Gas Company Limited (7.13%) and Odin Energy Limited (17.64%). Denis Patten, a founding director of QGC, appointed to VPE board as Chairman along with Odin Energy Limited directors Alex Bajada and Anthony Short.
25. Offers from Australian and USA industry parties have been invited for the purchase of Victoria Petroleum USA Inc., the wholly owned US subsidiary of VPE. Strong industry interest has been received with the anticipated sale to take place in July 2008. Proceeds from the sale will be used for ongoing development drilling in VPE's Cooper Basin and Queensland CSG interests.
26. Victoria Petroleum N.L. has a 5.3% interest in Samson Oil & Gas Limited (ASX Code: SSN), an active oil and gas explorer and producer in North America listed on the Australian Stock Exchange and AMEX.
27. Victoria Petroleum N.L. has a 7.24% interest in Greenearth Energy Limited (ASX code: GER), an active geothermal exploration company. Greenearth Energy holds three promising geothermal exploration licenses in Victoria immediately adjacent to power generating infrastructure and the major electricity markets of Melbourne and Geelong. Two of these geothermal exploration licences, GEL 12 and 13 are adjacent to and containing the Trifon-2 well that has flowed steam and hot water at 90 degrees C from the relatively shallow depth of 2,200 metres.
28. Cash and current investments as at 31 March 2008 to fund planned exploration and development drilling activities, as follows:

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