ExxonMobil and Oil Search Sign Agreement for PNG Gas

ExxonMobil's subsidiary, Esso Highlands Limited, has signed a new Heads of Agreement covering the PNG Gas Project which expired on June 30, 2003. ExxonMobil, Oil Search, MRDC and JPP (Japan PNG Petroleum) have agreed to continue their efforts to commercialize their interests in PNG gas resources from the Hides, Kutubu, Gobe and Moran fields in the Southern Highlands of PNG under a new Project with a new HOA. The new Project also includes the addition of the Angore and liquids rich Juha fields. The addition of these new resources in combination with the new HOA will provide greater flexibility and more certainty in project decision making.

As operator ExxonMobil will have responsibility for gas marketing and will encourage customers that have previously signed indicative sales agreements to maintain their commitment to PNG gas. As the project moves forward ExxonMobil will match its marketing effort to existing and potential customers' willingness to commit to the project. The Project participants are ready and willing to move the project to the next phase of development once sufficient customers are ready to make firm commitments for gas.

"We remain confident in the investment climate in PNG and believe that demand for competitively priced gas in Australia could provide a market opportunity for PNG gas," said Mr. Rob Franklin, ExxonMobil Gas and Power Marketing Company, Vice President, New Business Development. "We appreciate the support that has been provided by the PNG, Australian Commonwealth and Queensland Governments in our efforts to commercialize PNG Gas".

The participating interests in the new project are: ExxonMobil as operator with 40.67%; Oil Search 51.37%; JPP 4.21%; MRDC 3.75%.