QUARTERLY REPORT FOR THE PERIOD ENDING 30 JUNE 2007

HIGHLIGHTS FOR THE QUARTER

Exploration Activity - Australia and USA

1. . Commencement of eight well exploration program over next six months in South Australian and Queensland Cooper Basin where Victoria Petroleum holds largest gross and net acreage exploration area in 14 permits with average 30% interest.
2. Continuing exploration success in South Australian Cooper Basin permits with April 2007 oil discovery at Wirraway-1 in PEL 104 following on from initial Growler-1 oil discovery in September 2006, maintaining 100% exploration success rate.
3. Recovery of oil from Wirraway-1 on open hole drill stem test from Birkhead sands at rate of 67 barrels of oil per day from gross 17 metre oil column in April 2007
4. Wirraway and Growler oil discoveries providing further confirmation of possible aerially significant "Jurassic oil fairway" in western portion of PEL 104 and PEL 111 covering approximately 750 square kms with potential with further exploration success to contain a resource of up to 100 million barrels of oil in place. Over 20 prospects and leads mapped. Seven drillable prospects have been identified with unrisked P50 recoverable reserves of 21 million barrels of oil in the Birkhead formation, if oil is present.
5. Successful appraisal of Wirraway and Growler oil discoveries with Growler-2 oil discovery with gross 15 metre oil column cored.
6. Drilling success at Wilpinnie-4 on the Tomcat Prospect, PPL 93/PEL 115, in January 2007 with Wilpinnie-4 cased and suspended as a potential future oil producer with commencement of production testing by Santos in late July 2007.
7. The potential for the oil pool in Wilpinnie-4 to extend from PPL93 into PEL 115 is considered promising based on the up dip gross oil column of 18 metres drilled and partially tested in Wilpinnie-4 at an inferred rate of 144 barrels of oil per day. The Tomcat oil pool is interpreted to straddle PEL 115 and PPL 93 with a P10 resource of up to 6 million barrel oil potential subject to production testing of Wilpinnie-4 and up dip drilling in PEL 115. Wilpinnie-4 was drilled by Santos under a farmout agreement with Santos and the PPL 93 parties.
8. In southwest Queensland Cooper Basin permits, a two well drilling program planned to start in third quarter 2007 in the Barta and Wompi blocks of ATP 752P. Candidates for drilling are the 3D defined Cabot and Nora prospects testing a cumulative resource with an unrisked recoverable oil potential up to 8 million barrels, if oil is present. All drilling is adjacent to Santos oil production and infrastructure.
9. Coal Seam Gas (CSG) joint venture with Bow Energy Ltd in Surat Basin Don Juan CSG Project targeting potential resource of up to 500 PJ of methane gas.
10. Exploration success continues in the Margarita Gas exploration Project, onshore Texas Gulf Coast gas with the Dona Carlota -1 and Agavero-1 gas discoveries during the quarter in addition to the previous El Viejito-1, and Dos Dedos-1 gas discoveries and Milagro-1 oil discovery. Drilling of the Climaco-1 exploration well in progress.
11. Commercial success in the Margarita Gas Exploration Project with Milagro-1 connected to sales line and producing at a rate of 0.5 million cubic feet per day, with the Dona Carlota-1 production tested at 1 million cubic feet per day awaiting tie in to the sales line. Production testing of the Agavero-1 gas discovery planned shortly.
12. Commencement of exploration on the West Florence Gas Project, Colorado USA with potential resource of up to 100 billion cubic feet of gas with the drilling of West Florence-1 with multiple target potential oil and gas zones testing in August 2007.
13. Twelve exploration and appraisal wells are planned over the next six months as per the current drilling schedule with eight of the wells in the SA and Qld Cooper Basin.

Development and Production Activity - Australia and USA

14. Total gross production over the quarter estimated at 244,539 barrels of oil equivalent with net 20,097 barrels of oil equivalent to Victoria Petroleum at an average production rate of 221 barrels of oil equivalent per day.
15. High oil prices during the quarter provided estimated oil and gas net cash flow of $0.93 million on gross oil and gas sales of $1.61 million.
16. The Mirage and Ventura oil fields in PEL 115, South Australian Cooper Basin continued production during the quarter at an average combined rate of 256 barrels of oil per day. Current Proved and Probable (2P) recoverable reserves for the fields are estimated at 1.59 million barrels. A Field Development Plan to guide development drilling planned for the second half 2007 is currently in preparation.
17. Short Term Production test of the Growler-1 oil discovery in the South Australian Cooper Basin during the quarter indicates production on pump in the range of 160 to 250 barrels of oil per day to be confirmed by an Extended Production Test planned for December 2007.
18. Further work on the Eagle Oil Pool Development Project is currently awaiting an independent report evaluating past operations and proposing a forward drilling and evaluation program. Upon evaluation of this report and following farmout of Victoria Petroleum's interest in the Eagle Oil Pool Development Project, a further well is planned to be drilled in late 2007 to further appraise the Eagle Oil Pool with its potential P10 resource of up to 34 million barrels of oil and 58 billion cubic feet of gas.
19. Production testing of the Wiplinnie-4 oil zone within the Tomcat oil pool is being carried out in late July 2007 by Santos planned to evaluate the wells production capabilities and the extent to which the Tomcat oil pool may extend into PEL 115.
20. It is anticipated that by the end of calendar 2007 that with successful development drilling from existing oil discoveries, the current and planned future Victoria Petroleum net oil and gas production will generate net cash flow estimated at $5 million for the year.

Other Assets

21. Victoria Petroleum N.L. has a 5.3% interest in Samson Oil & Gas Limited, an active oil and gas explorer and producer in North America listed on the Australian Stock Exchange.
22. Cash and current investments as at September 30, 2006 of $9.4 million to fund planned exploration and development drilling activities, as follows:

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