Niko Resources Provides Operations Update

In India at Hazira the "Alpha" offshore platform was installed on location in April 2004. The Precision 703 drilling rig, which was specifically designed for the platform was installed in June 2004. Drilling on the A-2 well has commenced and production is expected to start in August 2004.

At Surat, production from the shallow wells started in April 2004 and is currently producing at 6 to 8 million cubic feet per day. The Company also anticipates the start-up of production of the Bheema gas well by September 2004.

At D-6 the K-1 and K-2 exploration wells were drilled. Both wells encountered commercial gas with the K-2 well being tested at equipment restricted rates of 30 million cubic feet per day. A rig has been mobilized to a new anomaly and the M-1 well is currently drilling. An additional 2,500 square kilometer 3D seismic program was conducted over an area to the east and south of the existing 1,800 square kilometer 3D seismic area. Processing and interpretation of this new seismic is underway with additional exploratory drilling to commence in 2005.

At NEC-25 the first three wells have been drilled and proven the presence of hydrocarbons. A fourth exploration well is currently being drilled. Upon completion of the fifth well, the operator will begin work on the field development plan.

The Feni field in Bangladesh covers an area of 43 square kilometers and lies on the main gas line to Chittagong. The field development plan for Feni has been approved and the first well drilled, Feni-3 has tested gas in two separate sands and the well has been completed. Production facilities are nearly complete and gas production is expected to commence in August 2004. The second well, Feni-4 is currently drilling.

At Chattak, the Company completed an extensive 3D seismic program. The seismic is currently being processed and the first drilling location will be identified for the fall of 2004.

On Block 9, a second well, Lalmai resulted in a gas discovery which tested 8.6 million cubic feet per day. A third exploration well, Bangora is currently drilling.

Niko is anticipating, with the commencement of drilling from the Hazira offshore platform and the Company's share of production is expected to increase to 75 mmcf/day by March 2005. Production at Hazira should average 50mmcf/day to 60mmcf/ day during fiscal 2005.

The Company also anticipates the startup of production of the Bheema gas well at Surat by September 2004 after which production is anticipated to level off at 12 mmcf/day to 17 mmcf/day.

Production at Feni is scheduled to commence in August 2004 and Niko's share should reach approximately 20 mmcf/day by the fall of 2004.

The Company's total production outlook for fiscal 2005 is expected to average 70 mmcf/day to 85 mmcf/day with a fiscal year-end exit rate of 95-110 mmcf/day.