Amity Oil to Fastrack Development of Turkish Discoveries

The Thrace Joint Venture participants, Amity and TPAO, have approved work programs and budgets for the simultaneous, fast-track development of both the Adatepe and Cayirdere gas discoveries. Work on both developments is expected to start in a few weeks.

The Adatepe gas discovery is located 6 kilometers east of the Joint Venture's producing Gocerler gas field, in Turkey's Thrace Basin. The gas is clean and sweet, with almost identical calorific value and condensate content to Gocerler gas. The development plan of the Adatepe discovery calls for the construction of a 16 kilometer, 8-inch diameter, high-pressure pipeline, to deliver gas directly to customers in the Cerkeskoy Industrial area. The capacity of the line will be up to 37 million cubic feet per day. The discovery well is completed ready for production. Two appraisal/development wells are planned, with the first expected to start drilling within a month. Further development wells and a second Osmancik Formation exploration well are planned for Spring, 2004. A gas processing plant, based on the proven Gocerler design, will be constructed on the field. Production is planned to begin before severe winter conditions set in, in December. The plant will be modular, with an initial capacity of 10mmcfd, designed to be rapidly doubled, by adding a second separation module. Further increases in capacity can be easily added, subject to development drilling results in the Spring of 2004. The budget for the initial Adatepe plant and pipeline is US$2 million (100%) and the two wells US$1.8 million (100%). Amity will operate the Adatepe project.

The Cayirdere gas discovery is located about 33 kilometers east of the Gocerler gas field. The gas is good quality, with low condensate content. TPAO will operate a two well appraisal/development well drilling program to start in a month. Further wells will be considered after the results of a planned 3D seismic survey are available. TPAO's Cayirdere development plan is also aimed at achieving first commercial production before December 2003. A 9 kilometer, 6 inch diameter pipeline, with a capacity of 10 million cubic feet per day, is planned to connect the discovery to the TPAO trunk pipeline system and then to Joint Venture industrial gas customers. A gas processing plant, with a capacity of 10 million cubic feet per day, will be constructed near the discovery well. The budget for the Cayirdere plant and pipeline is US$0.71 million (100%) and the two wells US$1.4 million (100%). A 42 square kilometer, 3D seismic survey is planned to cover the discovery and other nearby leads, to assist with well location and reserve estimates. The seismic is expected to start this month. The budget for the seismic is US$0.44 million (100%). TPAO will operate the Cayirdere project.

Amity will fund its 50% share of both developments from cash flow and existing working capital.