Niko Closes on Bangladesh Acquisition

Niko Resources has closed on the acquisition of Chevron International Bangladesh on September 16th 2003. CIBL held a 60% working interest in the Production Sharing Contract (PSC) issued by the Government of the Peoples Republic of Bangladesh for Block 9. Block 9 covers approximately 6,880 square kilometers of land in the central area of Bangladesh surrounding Dhaka. In addition, the subsidiary is responsible for the costs associated with a 6.67% carried interest in the PSC held by Bangladesh Petroleum Exploration and Production Co. Ltd. which is a corporation controlled by the Bangladesh government.

Under the terms of the Share Purchase Agreement for the acquisition of CIBL, Niko assumed the obligations under the PSC and the Joint Operating Agreement (JOA) effective as of January 1, 2003. It is anticipated approximately US$17.5 million dollars will be required to fulfill the initial obligations under the PSC and JOA. US$2 million was paid to ChevronTexaco prior to closing and US$10 million was put in an escrow account to cover past and immediate future costs of drilling and other activities. Future drilling and other activities beyond the escrow account will be funded by Niko's internal financial resources. The initial obligations are expected to be completed within the next 8 to 9 months. Niko, through its subsidiary, has agreed to indemnify ChevronTexaco for all claims and losses arising from environmental and other matters on Block 9 lands whether they arose before or after the closing.

To date, there have been 450 square kilometers of 3D seismic and 1,010 kilometers of 2D seismic shot on the Block 9 lands. No wells have been drilled by the consortium or reserves assigned to any of the Block 9 lands.