Anzon Sells 10% Stake in BMJ Project to Itochu

Anzon Australia Limited will receive A$123 million having concluded negotiations with ITOCHU Corporation of Japan for the sale of 10% of the Basker Manta Gummy (BMG) Joint Venture. Anzon and Beach Petroleum Limited each divested 10% of their holding to ITOCHU Corporation which will use its wholly owned subsidiary CIECO Exploration and Production (Australia) Pty Ltd to become a 20% participant in the JV.

In less than three years since listing on the ASX (December 2004), Anzon is operating a producing offshore venture valued in excess of A$1.2 billion and is effectively debt free. The Company has recorded an operating profit each year since listing. Anzon is now ready to broaden its portfolio of assets and continue its aggressive growth objectives.

Anzon has enjoyed a rapid growth achieving many milestones in its short history through innovative development and production. The fast-tracked development of the Basker Manta oil project commenced when the Company secured the Floating Production Storage and Offloading (FPSO) vessel, the Crystal Ocean, barely a week after listing on the ASX, a unique vessel suitable for Bass Strait operations. In less than eleven months the Company joined the ranks of Australia's leading oil producers with the JV initially producing an average of 8,000 barrels of oil per day. Anzon is only the second Operator to have produced oil in Bass Strait.

Employing innovative state of the art technology, Anzon combined the services of the FPSO Crystal Ocean with the Aframax-sized shuttle tanker, Basker Spirit. The FPSO and shuttle tanker guarantees minimal footprint and virtually zero environmental intrusion. In another milestone event, on January 13, 2006, Anzon completed the first ever ship-to-ship transfer when the Basker Spirit transferred 300,000 barrels to the Braveheart in Westernport Bay, Victoria. The JV achieved the sale of 1,000,000 barrels during its second year of operation and has now produced in excess of 2,000,000 barrels.

Executive Chairman, Steven Koroknay welcomed ITOCHU stating:

"We are extremely proud to welcome ITOCHU Corporation as a participant in the BMG Project.

The ITOCHU Corporation is a highly respected international organization built on strong global investments. Their input not only inspires confidence in our operation but provides unique opportunities for Anzon to grow internationally."

The farm-in agreement gives a gross value of the BMG project as A$1.23 billion with Anzon and Beach each receiving A$123 million for their respective 10% divestment. The consideration was determined after a competitive tender process including several weeks of significant due diligence in respect of all aspects of the BMG Project.

Mr. Koroknay believes the farm-in agreement validates the soundness of the BMG Project and Anzon as the project Operator. The Joint Venture will benefit from the technical competence and financial strength of ITOCHU.

The Company commenced in 2004, with full ownership of the fields in the current BMG JV, and with appropriate risk and financial management it now owns 40%, operates the developed oil fields and is effectively debt free. Anzon will continue to seek new and exciting projects and looks forward to a prosperous association with the ITOCHU Corporation.

On completion the participants in the Basker Manta Joint Venture will be Anzon Australia Limited as operator with 40%; Beach Petroleum Limited with 40% and CIECO Exploration and Production (Australia) Pty Ltd with 20%.