Tap Oil Delays Drilling at Brunei

Tap Oil advised that the commencement of drilling of the Mawar-1 well in Block M, onshore Brunei, has been delayed until mid August. As is normal procedure, Tap has undertaken thorough testing of the rig components before the commencing operations. During this process some critical items were found to be defective. The rig contractor, MBCentury, is now in the process of repairing and/or replacing the faulty equipment. Drilling operations will commence once Tap is satisfied that the rig is functioning properly and that Mawar-1 can be drilled safely and efficiently.

Tap plans to drill two wells in this initial campaign in Block M, commencing with Mawar-1. Mawar-1 is characterized as a moderate to low risk drilling opportunity due to the available offset well control and 3D seismic data set. Mawar-1 is approximately 80 km southwest of Bandar Seri Begawan and 30 km south of the giant Seria oil Field.

Block M is being explored under a Production Sharing Agreement signed with Brunei National Petroleum Company (PetroleumBRUNEI) in August 2006.

Tap's CEO Peter Stickland said, "While we are disappointed that drilling has been delayed in Block M we are pleased that our testing has detected this equipment fault prior to operations commencing and that the drilling contractor has a plan to rectify the fault in a relatively short timeframe. Once we are satisfied that the rig is functioning we will commence drilling our first well in Brunei, Block M. Mawar-1 has significant oil potential at moderate to low risk due to the offset well control and interpretation on modern 3D seismic data. Brunei's established infrastructure means we will be able to quickly monetize any commercial discovery."