Syntroleum Completes Transfer of Interest in Peru Z-1 Block

Syntroleum Corporation's subsidiary, Syntroleum Peru Holdings, Ltd., has closed the sale of its 95 percent interest in the Exploration License for Block Z-1, offshore Peru to Nuevo Peru Ltd., a subsidiary of Nuevo Energy Company (NYSE: NEV). All Peru government approvals have been received, the block has been transferred, and Nuevo now has responsibility for all remaining obligations for the 7-year Exploration License. The sale price includes an upfront payment to Syntroleum as well as a contingent future payment depending upon whether there is a commercial discovery as Nuevo Peru continues to explore Block Z-1.

"We acquired the Z-1 Block because we were looking for enough gas to support a GTL plant and previous companies had discovered gas on the block," said Syntroleum President, Jack Holmes. "Our study of previous drilling and seismic data concluded that there was not enough discovered gas to support the GTL plant. We did, however, identify exploration plays on the block, but Syntroleum is focused on discovered gas, not exploration. We still believe that GTL will be a viable option for Peru as additional gas reserves are discovered and developed in the future."

Syntroleum Corporation owns a proprietary gas-to-liquids (GTL) process for converting natural gas into synthetic liquid hydrocarbons. The company plans to use its GTL technology, as well as other third party gas processing technologies, to develop and participate in gas monetization projects in a number of global locations.

Nuevo Energy Company is a Houston, Texas-based company primarily engaged in the acquisition, exploitation, development, exploration and production of crude oil and natural gas. Nuevo's domestic producing properties are located onshore and offshore California and in West Texas. Nuevo is the largest independent producer of oil and gas in California. The Company's international producing property is located offshore the Republic of Congo in West Africa.