Roc Begins Beibu Gulf Appraisal Well

On May 8, 2004 the Nanhai IV jackup was released from the Wei 12-8-3 location after the 3D element of the VSP operation was cancelled due to mechanical problems with a contractor's equipment. On May 10, 2004 the Nanhai IV started drilling the Wei 12-3-4 appraisal well in approximately 33 meters of water, 2 kilometers north of the Wei 12-8-3 appraisal well.

The well is expected to take up to 10 days to drill, log and fully evaluate to a Total Depth of approximately 1,510 meters, prior to plugging and abandonment – which will be undertaken regardless of the results of the well – and rig release. The Wei-12-3-4 well will be a down dip appraisal of the Wei 12-3-1 oil discovery which was drilled in 1982 and flowed 36 degree API oil at 1,380 BOPD from the Weizhou Formation.

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 of interest is available. 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.

The Block 22/12 Joint Venture consists of:

Roc Oil (China) Company . . . . 40% and Operator
Horizon Oil Limited . . . . . . . . .30%
Petsec Energy Limited . . . . . . 25%
Oil Australia Pty Limited . . . .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 for up to a 51% equity level in the development.