Langsa Field Well Back Production

The Matrix Oil L1 well has been placed back on production and is currently flowing at an average rate of 2,500 barrel of oil per day (BOPD). The production well is located at the northern end of the Company operated L Field in the Langsa Technical Assistance Contract (TAC) area in the offshore North Sumatra Basin of Indonesia. The L1 well was taken out of production on 21 December 2001 following the detection of a leak of glycol in one of the flow-lines to its sub-sea production system. The well had been flowing at a rate of approximately 3,800 BOPD before the leak in the flow-line was detected. The Company is pleased that, after exhaustive testing and analysis of the problem, including the commissioning of a “remote operated vehicle” to inspect the sub-sea tree and umbilical lines, it has been able to re-open the well to produce oil and improve cash flow. No environmental damage has been caused by the leak of the water-based glycol control line fluid. While the well is continuing to leak glycol, the rate is much reduced and is acceptable. The operation of the well is being closely monitored, and the Company plans to maintain production at this rate until the leak is permanently repaired. The L2 well, located at the southern end of the field, continues to flow at between 2,500 and 3,000 barrels per day, as advised when the well was first brought on production in early December 2001.

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