Activities for the Quarter Ended 31 December 2009
Mosaic Oil NL has had a busy quarter with several major initiatives well underway to deliver value to our
shareholders.

I am pleased to report that both production and revenue have increased significantly
compared to the previous quarter.

Additionally, we have successfully completed a significant capital raising
and the company is in a sound financial position from which to grow.
Primarily the team have been focussed on work for the 2010 drilling campaign which has three objectives:
1.

Increase production from new development wells
2.

Test the fraccing concept and its applicability to Mosaic"s Surat fields
3.

Delineating the Churchie and Waggamba Fields to support full field development in the coming years
We are continuing to review the current assets for opportunities to trim costs, increase production and enhance the
commercial return from our Surat Basin reserves.

Mosaic is also working towards the commercialisation of the
underground gas storage project (SSUGS), and evaluating a number of new venture opportunities that have the
potential to complement our existing business, including opportunities in New Zealand.
I look forward to updating shareholders and the market on Mosaic Oil"s 2010 drilling campaign and any deals and
new ventures that we are in a position to disclose and that we believe will provide value to our shareholders.

It is
building up to be an exciting year ahead for Mosaic.
Yours faithfully
Alexander Parks
Chief Executive Officer
CORPORATE HIGHLIGHTS

Successfully raised $10.9 million by way of a
placement of 94.74 million shares at 11.5
cents.

Mosaic successfully raised $10.3 million under
the Share Purchase Plan (SPP) issuing
93,365,306 shares at an issue price of 11 cents.

Total funding raised during the quarter was
$20.5 million (net of share issue costs).

Appointed Chief Commercial Officer.

Strong Oil/Condensate prices for the quarter
with average price of $AUD $95.15 per barrel.

Cash receipts of $6.374million for the quarter.
OPERATIONAL HIGHLIGHTS

Production increased by 39% (BOE) from
previous quarter including a 43% increase in
gas sales.

The new Taylor gas wells contributed
strongly to the production performance

Mosaic continued discussions with potential
customers for the underground gas storage
project (SSUGS).

Commenced acquisition of a 2D seismic
program in PEP 51151, Taranaki Basin,
New Zealand.

Fracture Stimulation studies being carried
out for the Waggamba and Churchie fields.