Petsec to Drill for Gas on Vermilion Prospect

Petsec expects to begin a two-well drilling program on the Vermilion Block 258 in the Gulf of Mexico in the fourth quarter of 2003. The two-well program will test an estimated 33 bcf of gross unrisked mapped potential. This potential includes an estimated 8 bcf which was encountered by a 1988 drill hole but not developed. Drilling success at Vermilion 258 will require the construction of a platform and production facilities allowing production to begin in the third quarter of 2004.

Petsec acquired the Vermilion 258 lease in November 2000 at a cost of $2.7 million. The lease had produced 37 bcf from two wells up to 1991 in the same stratigraphic interval as the 8 bcf encountered in 1988. The substantial Vermilion 245 gas field is adjacent to and north of Vermilion 258.

Petsec has mapped additional prospects on the eastern side of Vermilion 258 which require a separate surface location to the first two wells. The Company has estimated 20 bcf of gross unrisked mapped potential for these prospects which overlap the two adjacent leases, Vermilion 257 and 246, which were awarded to Petsec at a cost of $458,000 following successful bids at the March 2003 Central Gulf of Mexico lease sale. It is anticipated that drilling on these prospects will begin in the fourth quarter of 2004.