Tap Oil Farms Out Stake in Sheila-1 Well Offshore Australia

Tap Oil has entered into a farmout agreement with Magellan Petroleum and Electro Silica Oil & Gas whereby Tap and Magellan will each assign a 25% interest in WA-291-P to Electro Silica in consideration for Electro Silica contributing to the funding of the Sheila-1 exploration well on a promote basis.

Tap will operate the well and the permit and is in the process of planning the well for drilling as early as November 2004 subject to rig availability and the necessary approvals being granted.

The Sheila prospect is located in the Beagle Sub-Basin as per the attached map. The Sheila prospect is a large structural trap against the downthrown side of the basin bounding fault. The prospect has the potential to contain up to 100 mmbbls of recoverable oil if successful.

Tap is pleased to have concluded this agreement with Electro Silica and looks forward to drilling the well as soon as possible.

Following completion of the assignment pursuant to the farmout agreement, the interest of the participants in WA-291-P shall be as follows:

WA-291-P participants are Tap Oil as operator with 25%; Magellan Petroleum with 25% and Electo Silica with 50%.