Origin Updates Dispute with EPIC Contractor Clough

Origin Energy as operator for the BassGas Joint Venture confirms that on November 30, 2004 the Joint Venture parties called on a bank guarantee in the sum of $19.3 million provided by EPIC Contractor Clough Engineering Limited.

The Joint Venturers decided to call upon the Guarantee following the failure or refusal by Clough to perform significant work that is required of it to achieve completion of Separable Portion 3 of the contract (Ready for Start Up RFSU) in accordance with the EPIC Contract. It is noted that in the release by Clough reference was made to third party verification that "the offshore facilities are contractually Ready for Start Up". Origin Energy wishes to clarify that while an inspection of certain elements of the systems on the platform was undertaken by a third party engaged by Clough, it did not cover all of the work required to be completed under the Contract to ensure that RFSU was achieved.

While delays in completion of works has resulted in the project being significantly behind schedule the construction phase of the project is now nearing completion.

The Joint Venture does not wish to make any further comment on the claims or statements made by Clough as the matter should be more appropriately addressed through the agreed contractual dispute processes and not in the public forum.

Participants in the BassGas Joint Venture are Origin Energy Resources as operator with 32.5%; Origin Energy Northwest with 5%; AWE with 30%; CalEnergy with 20% and Wandoo Petroleum with 12.5%.

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