Mitsui & Woodside Approve Additional Investment for Enfield Project

Mitsui's subsidiary, Mitsui E&P Australia Pty Ltd. ("MEPAU"), has approved its joint venture budget for the Enfield 2007 well work-over program, including additional expenditure of approximately US$390 million (MEPAU share: US$150 million) for drilling of additional wells and work-over of existing wells in order to increase production from the Enfield Oil Project, in which it owns a 40% interest alongside joint venture partner and operator Woodside Energy Ltd.

The Enfield oil field commenced production on July 24, 2006, two months ahead of schedule, and achieved production of 74,000 barrels per day in September. In October, however, ENA-03, one of the major production wells, was shut-in due to unexpected sand production and early water breakthrough. Recent gross oil production has been a little over 40,000 barrels per day from four of the five production wells with ENA-03 remained shut-in.

Since such incident, the geological reservoir model was restudied and updated in line with production history. As the viability of the well work-over program of four to seven wells, including infill well drilling, has been confirmed, the joint venture has agreed on additional expenditures to improve production rates.

Following the completion of the work-over, the average production rate for 2007 is expected to be 45,000 to 55,000 barrels per day. Delays to the delivery of critical subsea equipment may cause the annual production rate to come in at the lower end of this range.

Both companies have placed the improvement of the Enfield Oil Project as one of its top priorities and will make continuous effort to improve the productivity of its oil production. Further well work-over in 2008 is also under study.

Enfield Oil Project

In March 2004, MEPAU acquired from Woodside, one of the largest oil and gas exploration and production companies in Australia, a 40% interest in production license WA-28-L and exploration permit WA-271-P, located in offshore Northwestern Australia, which together contained three discovered but undeveloped oil fields: Enfield, Vincent and Laverda.

The Enfield project started production on July 24, 2006. The production facility is composed of 13 wells (5 production, 6 water reinjection, 2 gas reinjection) and the floating production storage and offloading vessel, "Nganhurra".

Vincent is currently under development, with production expected to start in 1H 2008.

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