Santa Fe Snyder Corporation announced a second discovery on its 15/34 Block in the Pearl River Mouth Basin of the South China Sea. The Panyu 5-1-1 well, located 11 miles east of its 1998 Panyu 4-2 discovery, encountered approximately 400 net feet of oil bearing sands within 20 individual reservoirs. Preliminary evaluations based on logging, testing and 3D seismic indicate the new discovery to be potentially larger than the Panyu 4-2 discovery which contains an estimated 50 million barrels of recoverable crude oil confirmed by an appraisal well drilled in August of this year. "The success of the Panyu 5-1 (BOOTES) prospect confirms the existence of a substantial hydrocarbon system in Block 15/34. This second discovery reinforces our belief that the Company's 3.4 million net acres in the South China Sea will grow into a significant asset." said James L. Payne, CEO of Santa Fe Snyder. Having completed the drilling and testing of the Panyu 5-1-1 well, the Nanhai VI rig is now proceeding to the Panyu 10-3 (DRACO) prospect. This prospect is located 7 miles southwest of the Panyu 4-2 Field and within the defined hydrocarbon basin. The well is proposed to a total depth of 11,483 feet and will require about 20 days to drill. Santa Fe Snyder through its subsidiary, Santa Fe Energy Resources of China, Ltd., is the operator of Block 15/34 and has a 50 percent working interest. SCS Resources, Ltd., has the remaining 50 percent interest. Under the terms of the production sharing contract for Block 15/34, the China National Offshore Oil Company (CNOOC) has an option to participate with up to a 51 percent working interest in the development of commercial discoveries made on the block which, if exercised, would reduce proportionally the interests of Santa Fe and SCS Resources.

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