CNOOC Teams Up with TARC to Explore the Pearl River Mouth Basin

CNOOC says that its parent company, China National Offshore Oil Corporation (''CNOOC'') has entered into a production sharing contract (PSC) for Block 03/27 and a geophysical agreement for Block 28/20 with Texas American Resources Company (TARC).

Block 03/27, located in Pearl River Mouth Basin in the Eastern South China Sea, covers a total area of 10,569 square kilometers with water depth ranging from 50 to 100 meters.

Under the terms of the contract, TARC is committed to drill wildcats during the exploration period. TARC will fund 100 percent exploration expenditure and CNOOC has the right to back-in with up to a 51% working interest at no cost in any commercial discoveries in the block.

Block 28/20, with an area of 7,625 square kilometers, is also located in the same basin. According to the geophysical agreement, TARC will acquire 3D seismic data within the block. And it has the option to sign a PSC with CNOOC for the block at the expiration of the agreement.

This marks the first step in cooperation between TARC and the Company. Mr. Zhu Weilin, Vice President of the Company and General Manager of the Exploration Department commented, ''The signing of the agreements is a good start. And it is also a symbol of TARC's confidence in the potential of Pearl River Mouth Basin. We sincerely hope TARC, with its expertise and management skills, will be successful to brighten the prospect of the basin. ''

TARC, formed in 1990, is an Austin-based independent private oil company in U.S. Its oil and gas exploration and production is mainly located at the Rocky mountain area and Texas.