Tui Oilfields Declared Commercial

Australian Worldwide Exploration Limited reports that the PEP 38460 joint venture has determined that the Tui-Amokura-Pateke oil fields, located in the offshore Taranaki basin in New Zealand are commercially viable to develop.

The declaration was made by the joint venture based on a proved and probable reserve base in the range of 20-30 million barrels of recoverable oil and a development concept consisting of three or four subsea wells tied back to a floating production, storage and load-out facility ("FPSO"). Capital costs for the subsea and subsurface components of the development are expected to be in the range of US$120-150 million. If an FPSO were to be purchased rather than leased, additional capital expenditure would be required.

The joint venture has approved a budget to fund the start of Front End Engineering and Design ("FEED") work which will allow the final financial commitment to the project to be made in June 2005. Assuming the timely receipt of regulatory approvals, first oil is planned for Q3-Q4 of 2006.

Commenting on the announcement, AWE's managing director Mr. Bruce Phillips said:

"This is an important initial step in the process of commercializing our oil discoveries in New Zealand.

"Whilst the development concept for the fields is straightforward, it should be stressed that a final investment decision will not be made until we have completed the requisite engineering studies and secured a suitable FPSO or similar production facility. This work is now underway, moving towards a target date for project sanction in mid-2005."

Participants in PEP 38460 are New Zealand Overseas Petroleum with 45: AWE with 20%; Mitsui with 12.55; Stewart Petroleum with 12.5% and WM Petroleum with 10%.
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