Paladin Completes Acquisition of North Sea Assets

Paladin Expro Limited has completed the acquisition from BP and Amerada Hess of a portfolio of producing interests in the Arbroath, Montrose and Arkwright Fields and surrounding acreage including the Carnoustie and Wood discoveries, located in the UK sector of the North Sea that was announced at the end of last year. Paladin has also assumed operatorship of the fields effective May 20, 2003.

The total consideration payable was US$153 million as at the effective date of January 1, 2003. As a result of adjustments for interest, for working capital as of the effective date, for cash flow movements in respect of the period between the effective date and completion, and for a deposit of US$15.3 million paid following shareholder approval in January, the consideration paid on completion was US$119.4 million, funded by drawdown from existing bank facilities.

Current production from the Arbroath, Montrose and Arkwright Fields is approximately 19,000 bopd gross (11,200 bopd net). As a result of the acquisition, Group production is expected to average 45,000 boepd in 2003, an increase of 55 percent over that achieved in 2002.

Roy Franklin, Chief Executive of Paladin, commented: 'Completion of this acquisition is a milestone in the development of the Company. The transfer of operatorship to Paladin has been achieved very effectively. That has been due, in no small part, to the efforts of our operating alliance partners, Petrofac and Helix RDS, and to the pragmatic attitude of BP, the previous operator, and its joint venture partners.'