Zhao Dong Development Projects Approved

The Zhao Dong Joint Venture and relevant Government authorities in China have recently provided a number of key approvals covering ROC's operations in the Bohai Bay.

The approvals received cover a number of activities which represent more than US $500 million of proposed development expenditure relating to the expansion of existing facilities, the installation of new facilities and the drilling of more than 120 development wells between now and 2011. In summary:

--The production constraints announced in October 2006 and revised in January 2007, have been removed. As a consequence, production for 2007 from the Zhao Dong C and D oil fields is forecast to be about 9 MMBO, approximately 25,000 BOPD (ROC net: 6,125 BOPD).

--The US$373 million Incremental Development Plan ("IDP") for the C and D oil fields has been approved.

--The US$169 million 2007 Work Program and Budget for the C and D fields has been approved, including the drilling of 15 wells which represent the first phase of the IDP.

--The US$150 million development program for the C4 Oil Field has been approved.

--As part of the IDP, the undeveloped Extended Reach Area ("ERA"), in the northeastern part of the C Field, will be targeted over the next five years by at least 35 wells.

C and D Fields: 2007 Production Rates

The oil production constraints announced October 10, 2006 and revised in January 2007, have been lifted.

A well optimization program has commenced for the C and D oil fields which together with development drilling is designed to achieve a total gross oil production of approximately 9 MMBO for 2007, equivalent to a daily gross average production rate of about 25,000 BOPD. This target is relatively ambitious given the production constraints under which the fields operated for the first five weeks of 2007, but it still compares favorably to 2006 production of 8.7 MMBO, approximately 23,800 BOPD (ROC net: 5,835 BOPD).

C and D Fields: IDP

Government and Joint Venture approvals have been received to proceed with the IDP for the C and D oil fields. The first phase of this five year program will begin immediately with the implementation of the 2007 Work Program and Budget (see below). Total costs for the IDP, including work to be undertaken as part of the 2007 approved budget, are anticipated to be approximately US$373 million (ROC net: US$91 million) of which US$331 million relates to drilling with the balance for construction of facilities.

The IDP requires the construction and installation of a second drilling platform and a second fluid processing and storage facility, both of which will be located adjacent to the existing Zhao Dong platforms.

The IDP includes the drilling of approximately 100 wells of which 15 will be drilled as part of the 2007 budget for the C and D fields and at least 35 will be drilled into the ERA (see below).

C and D Fields: 2007 Budget

The Joint Venture has approved a 2007 Work Program and Budget of US$169 million (ROC net US$41.4 million) for the C and D oil fields. This budget includes US$54 million for the drilling of 15 wells as part of the IDP, comprising 9 oil producers and 6 water injectors. Drilling is scheduled to commence during April 2007. Approximately US$43 million of the 2007 approved budget is for the expansion of the existing facilities, which is also part of the IDP.

C4 Field: Development Program

Approval has also been received for the C4 Oil Field development (ROC: 11.575% operated unitized interest). The total budget for the project is US$150 million (ROC: US$17.4 million) including approximately US$88 million for drilling and US$52 million for facilities.

The approved C4 Budget for 2007 is US$56 million (ROC net US$6.5 million) the bulk of which will relate to new facilities design and procurement. The development of the C4 field contemplates drilling 24 wells, comprising 15 oil producers and 9 water injectors from two conductor pods. A third, separate, pod will also be installed to serve as a pipeline terminal which will be tied back to the existing Zhao Dong platforms via a 4.5 km pipeline.

The current target for first oil from the C4/ERA is end 2008.

C Field: Extended Reach Area Drilling Program

A key part of the IDP is the drilling of at least 35 wells from the future C4 facilities into the undeveloped ERA in the northeast of the C Field which contains a significant part of the possible reserves in the Zhao Dong Block.

Drilling Rig Availability

To ensure timely execution of the C4 drilling activities, the C4 Unit Operating Committee has authorized ROC to enter into a pre-identified rig contract which is expected to allow C4 development drilling to commence in mid-2008 and to continue to 2011.

The IDP wells to be drilled in the C and D fields will be drilled by the existing rig located on the C-D Drilling Platform. Development drilling using this rig has been an integral part of the Joint Venture's activities since the initial Zhao Dong field development.

New Co-Venturer

Sinochem Corporation ("Sinochem"), one of the major Chinese state-owned oil companies, recently announced that it has purchased New XCL-China, LLC, whose sole asset is a 24.5% interest in the Zhao Dong Block. In its release, Sinochem also states that "The Acquisition represents Sinochem's entry into the domestic petroleum E&P industry in China, and complements our international petroleum production portfolio. From the perspective of Sinochem's global petroleum picture, it is of unique significance...."

ROC already works closely with two other state-owned Chinese oil companies, CNOOC Limited and PetroChina, and looks forward to working with its new partner in the Zhao Dong Block.

Commenting on the developments referred to above, Dr John Doran, ROC's CEO, stated that:

"The recent Government and Joint Venture approvals is good news for ROC's 19,000 shareholders.

The approvals set the scene for a very active and productive five year multi-field development growth phase; well beyond the predictive horizon which most Australian independents normally contemplate.

When ROC agreed to acquire its interest in the Zhao Dong Block in mid-2006, it said that the rationale was two-fold: access to the proved and probable reserves and realization of the upside potential. The scale of the planned activities and the magnitude of the related expenditures announced today, mean that both goals will be well and truly addressed during the next five years.

The timing of the Zhao Dong approvals fits very neatly into ROC's company-wide development schedule coming, as it does, a few months before production is due to begin at the Blane and Enoch oil fields in the North Sea and a few weeks after the Company announced that it is moving its fields in the Beibu Gulf, offshore southern China, towards development.

Importantly, the approvals also highlight the very good working relationship which has been established, in a relatively short time, between ROC and PetroChina, China's largest oil company, which, with a 51% interest, is the majority equity holder in the Zhao Dong Block."

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