press release

Bukat block farmout agreement reached

The following news release was issued by Arco.

JAKARTA, Indonesia, Nov. 22, 1999 -- Shell Exploration and Production Companies in Indonesia and a consortium consisting of ARCO, Lasmo and Unocal have entered into a farmout agreement under which Shell will assign 60% of their interest in the Bukat Block located in the deepwater part of the Tarakan Basin offshore northeast Kalimantan.

The agreement was entered into on September 27, 1999 and is still subject to approval by Pertamina, the state oil company of Indonesia, and the Government of Indonesia.

The Bukat Block is held under a Production Sharing Contract with Pertamina. The new participating interests are: Bukat Shell B.V. (40%), Atlantic Richfield Bukat (Indonesia) Ltd. (37.5%), Lasmo (Bukat) Ltd. (12.5%) and Unocal Bukat Ltd. (10%).

The farmout agreement also gives the consortium an option to acquire the same equity participation in the adjacent Ambalat PSC recently awarded to Shell.

Shell and its new co-venturers plan to acquire 2,000 kilometers of 2-D infill seismic in late 1999 to facilitate the selection of well sites for an exploratory drilling campaign that is scheduled to begin in the second quarter of 2000.

Updated: November 1999