Paladin Makes Second Tunisian Oil Discovery

Paladin announces the discovery and successful testing of oil in its Hawa-1 exploration well in the Borj el Khadra production concession in southern Tunisia.

The well operated by ENI Tunisia B.V. was spudded on September 18th and encountered an aggregate 46 meters of net oil pay and 9 meters of net gas pay in the

Acacus A and Tannezuft Formations over a gross interval of approximately 280 meters at a depth of approximately 3,300 meters. These zones are equivalent to productive zones in the nearby producing Adam Field, discovered in the Borj el Khadra concession in 2002.

During preliminary testing of the oil-bearing Acacus A intervals, the well produced at a rate of 2,460 bopd of 41 degrees API oil with a gas-to-oil ratio of c. 700 scf/bbl and flowing top hole pressure of 1,740 psi.

The drilling rig is currently being moved off location and more extensive production testing of all intervals considered to be hydrocarbon bearing will be conducted during the second half of December. The well will then be suspended as a production well pending approval of a field development plan and hook up to existing process and export facilities some 13 km distant. Paladin anticipates that field production will commence in early 2004.

Subject to the Tunisian state oil company, ETAP, confirming their intent to participate, Paladin will have a 7% interest in the Hawa Field. Paladin's partners' interests will be ETAP (30%), ENI (35%), and Pioneer Natural Resources (28%).

Roy Franklin, Chief Executive of Paladin, commented: 'This is the Company's second exploration success in Tunisia. The discovery can be rapidly tied back to existing facilities to complement our existing production from the nearby Adam Field.'