Novus on Schedule with Brantas Drilling Program

At present, the Brantas PSC located onshore East Java is in the middle of a multi-well development and appraisal program that commenced in late September 2002 with the spudding of the Wunut-9 development well.

Following the completion of Wunut-9 on November 1st, Wunut-3 was drilled and completed in December 2002. At present the Tanggulangin-2 well is being drilled, following which Wunut-4 is planned to be drilled, together with a workover of the Wunut-2 well.

This development program has been undertaken specifically to address the growing gas demand in East Java, which has created an excellent opportunity for the Brantas JV to increase gas sales. The proximity of the onshore gas fields to Surabaya, Indonesia's second largest city, places the Brantas PSC in a competitive position for securing any additional market growth compared to more remote fields which have higher development costs.

Potential demand for gas is such that the Brantas JV is looking for new reserves as well as drilling up the Wunut field.

Tanggulangin-1 made a modest discovery in shallow sands in late 2001 but then encountered drilling difficulties which meant the deeper section was not evaluated with electric logs. However, strong gas shows were encountered during drilling, indicating potential further gas reserves in this deeper section. Tanggulangin-1 was cased and suspended as a future producer from three shallow sands with approximately 30m of net gas pay.

Tanggulangin-2 is being drilled to explore the deeper section, which was not evaluated in the first well. It spudded on 25 December 2002 and intermediate logs are currently being acquiring prior to setting 7" liner at about 810 m and then drilling ahead to a proposed TD of 1219 m MD.

Novus has been producing from the Wunut field in the Brantas PSC since 1999. Initial production was around 4 MMscfd, with demand held back due to the influence of the Asian financial crisis, although the facilities were designed to handle 50 MMscfd in anticipation of an eventual recovery in gas demand. A combination of declining production from other suppliers to East Java and a steady growth in natural gas consumption has led to a market shortfall. The Brantas PSC has been quick to capture the window of opportunity and has increased production in 2002 to an average of over 20 MMscfd. Subsequent to the tying in of Wunut-9, production has peaked at nearly 33 MMscfd and the plan is to increase this further to the facility limit of over 50 MMscfd. Should demand for even higher gas production eventuate the facility capacity can be expanded to 80 MMscfd at minimal additional cost. Gas marketing arrangements are already in place for these increased production volumes.

Dr. Bob Williams, said: "Financially Brantas is proving to be a real winner for Novus. This asset has always been something of a sleeper in the portfolio, but 2003 is sure to be the year that it finally comes of age. The geological and economic elements have always been in place, and with the missing market component now falling neatly into place I expect Brantas to deliver meaningful revenue to Novus for many years.

"One of the great attractions with Brantas is the high sunk cost pool which means that Novus receives a greater proportion of the sales revenue compared to other PSCs in Indonesia. The result is that this particular asset has the most attractive fiscal regjme of any of our assets and this is a very real incentive for us to increase production."

The participants in the Brantas PSC are: Novus Petroleum with 50% and Lapindo Brantas, Inc as operator with the remaining 50%.