press release

Fletcher Challenge Energy spearheads Brunei's biggest exploration drilling campaign for a decade

The following news release was issued by Fletcher Challenge Energy.

3 April 2000, Brunei - This month Fletcher Challenge Energy will begin the most comprehensive offshore exploration drilling programme undertaken in Brunei for the last 10 years.

Commencing on the 15th of April, Fletcher Challenge Energy, with partner Unocal, will drill the first exploration well of up to five in Blocks A & CD. Located offshore Brunei, Blocks A & CD consist of approximately 2,400 square kilometers and have significant exploration potential with numerous prospective structures. Fletcher Challenge Energy has a 26.95% share and is the operator, Unocal has a further 26.95% share with the remainder owned by Brunei partners.

"The drilling of five offshore exploration wells in any one year is the largest number of wells drilled by any company over the last 10 years and makes Fletcher Challenge Energy a significant exploration player in Brunei," said Greig Gailey, Fletcher Challenge Energy CEO.

Fletcher Challenge Energy has used the latest 3D seismic technology and comprehensive risk analysis and volumetric assessment methodologies to develop a diverse portfolio of mature and technically sound prospects in Blocks A & CD.

The five wells selected for drilling come from a portfolio of 20 prospects and 33 leads. The majority of the prospects have unrisked reserves between 20-80 million barrels of oil equivalent (mmboe), many have upside potential of more than 100 mmboe and one has an upside of 300 mmboe.

Fletcher Challenge Energy plans to drill the first three wells in the Bendahara Selatan, Laksamana Utara and East Egret areas of Blocks A&CD. These are the highest-ranking prospects of strategic significance offering, diversity of the portfolio and for two of them, proximity to existing or planned infrastructure. The subsequent two wells are scheduled for appraisal or possibly further exploration.

Drilling the first three wells is expected to take 90-150 days. Dry-hole cost of a five well campaign net to Fletcher Challenge Energy is estimated at US$12.1 million.

Fletcher Challenge Energy has contracted "Hakuryu-3" a semi submersible drilling rig from the Japan Drilling Company for the programme.

Updated: April 2000