Galoc Development Reserves Certified by Gaffney Cline

Granby announces publication today by Nido Petroleum of the results of an independent reserves certification report conducted by Gaffney, Cline & Associates ('GCA') on the Galoc oil field. Granby has not however completed its own review of the underlying GCA interpretation and analysis. GCA are continuing their work to evaluate the upside potential of the Galoc oil field and the 'Proven & Probable & Possible' estimate is expected in late September, by which time Granby intends to complete its own review of the full GCA report and make a further announcement.

The reserves certified by GCA for the Galoc oil field are shown below. Granby, through its wholly owned subsidiary Team Oil Ltd, has a 9.14% indirect interest in the development via its 15.69% shareholding in the operator of the Galoc oil field development, Galoc Production Company ('GPC') which holds a 58.34% direct interest in the development. The net figures attributed below are Granby's pro-rata share of the net figures for GPC's interest in the Galoc oil field ('net working interest') derived from the GCA report.

The Galoc field is situated in Block C of Service Contract 14 (SC14), in the North West Palawan Basin, offshore Philippines. The field is located around 70 km west of Culion Island in a water depth of approximately 320 meters. The reservoir depth is at 2,100-2,220 meters. The Galoc structure has a 57+ meter gross oil column consisting of early Miocene turbiditic sandstone with 16% average reservoir porosity.

The Galoc field was discovered with the drilling of the Galoc-1 exploration well spudded in April 1981, operated by Philipines Cities Service Company (PCSI). A conventional drillstem test (DST) was conducted over 3 intervals with a combined rate of 5,218 stb/d. The maximum test rate was 1,828 stb/d; producing 35 degree API crude with a GOR of 609 scf/stb from an 8 meter interval.

Oil &                       Gross                       Net attributable to Granby         Operator

of barrels
             Proven     Proven &      Proven &      Proven     Proven &      Proven &          
                        Probable     Probable &                Probable     Probable &
                                      Possible                               Possible
Galoc          9.6        23.1          To be        0.83        1.8          To be          Galoc
Field                                 completed                             completed     Production
Source: Gaffney, Cline & Associates