Petsec Revenue Soars on Increased Gulf of Mexico Production

The re-emergence of Australian oil and gas company, Petsec Energy Limited, as a Gulf of Mexico producer is reflected in revenue of $38.7 million generated in calendar year 2003.

The Company's revenue was only $0.9 million in the previous year to 31 December 2002.

The 2003 revenue surge was achieved on net production to Petsec of 4.5 billion cubic feet of gas equivalent, compared with none in the previous year.

In its December quarter report lodged today with the ASX, Petsec said its net cash and liquid assets on hand at 31 December 2003 were the equivalent of $16.8 million.

This includes $9.8 million of the $11.6 million net of costs raised through a placement of 12.85 million shares at $0.95 per share, arranged in late December 2003.

Gas discoveries
The Vermilion 258 No 1 well discovered six hydrocarbon bearing sands with an estimated 27 meters (85 feet) of net gas pay and the No 2 well found three hydrocarbon bearing sands having an estimated 13 meters (42 feet) of net gas pay. Both wells have been suspended for future completion and production.

Mid-year production start-up
Executive Chairman, Mr Terry Fern stated that "Petsec has commenced construction of a $US7.8 million production platform, facilities and pipeline with production capacity of 45 million cubic feet of gas per day."

"Production from both wells is expected to commence in mid-year," he said.

"Following production start-up, further drilling is expected in the 2004 third quarter," Mr. Fern said.

Petsec's Vermilion 246, 257 and 258 leases are located approximately 105 kilometers (65 miles) south of Vermilion Parish, offshore Louisiana, USA in the Gulf of Mexico.

During the latest quarter, Petsec also successfully brought into production its West Cameron 352 No A14ST and West Cameron 343 No A19 wells.

Petsec also has a 25% working interest in a drilling program of two to five wells expected to commence soon in the Beibu Gulf, China, where another Australian company, Roc Oil Limited, is the operator.