Roc Begins Beibu Gulf Drilling Program

On April 13, 2004 the Wei 12-7-1 exploration well started drilling in approximately 30 meters of water, two kilometers north of the Wei 12-8-1 discovery well offshore China.

The well is expected to take up to ten days to drill, log and evaluate to a Total Depth of approximately 1,700 meters, prior to plugging and abandonment – which will be undertaken regardless of the results of the well – and rig release. The Wei 12-7 Prospect is estimated to have a mean unrisked proved and probable reserve potential of 43 mmbo.

Unless there are operational problems which would cause the drilling to be more prolonged than anticipated, ROC does not intend to release further information about the well until a preliminary interpretation of the wireline logs over the zone/s of interest is available, probably in a week's time. This is because, in this part of the Beibu Gulf, the reporting of "oil shows" observed while drilling, prior to the interpretation of wireline logs, is not particularly meaningful.

Wei 12-7-1 will be followed immediately by Wei 12-8-3, an appraisal of the Wei 12-8-2 field, which is also expected to take about 10 days from commencement of drilling to rig release. The Wei 12-8-2 discovery is estimated to have the potential to contain recoverable proved and probable reserves in the order of 20 mmbo, subject to successful appraisal drilling.

In the event of success with one or both of the first two wells, the planned appraisal and exploration program will be expanded to include up to three additional wells to be drilled in 2004.

The Block 22/12 Joint Venture consists of Roc Oil as operator with 40%; Horizon Oil with 30%; Petsec Energy with 25%; Oil Australia with 5%. In the event of a commercial development within Block 22/12 the interests held by the current joint venturers may reduce on a pro-rata basis by up to 51%, assuming that CNOOC exercises its right to participate up to a 51% equity level in the development.