press release

Drilling contract flags start of comprehensive Brunei exploration program

The following news release was issued by Fletcher Challenge Energy.

Brunei, Nov. 18, 1999 -- Fletcher Challenge Energy has reached the first milestone in its Brunei exploration program by awarding a drilling contract to the Japan Drilling Corporation Limited (JDC).

The company has contracted "Hakuryu-3," a semi-submersible drilling rig, from JDC to drill up to six wells in the A and C/D blocks. Located offshore Brunei, these blocks consist of approximately 2,400 square kilometers and have significant exploration potential numerous prospective structures. Fletcher Challenge Energy has a 26.95% share in the A and C/D blocks and is operator. Unocal Borneo Utara, Ltd. has a further 26.95% share, with the remainder owned by Brunei partners.

Fletcher Challenge Energy CEO Greig Galley said awarding the contract was confirmation of the company's commitment to grow. "The exploration drilling we have planned in Brunei is an excellent next step towards growth, especially following on from the successful completion of the Maharaja Lela development project. This latest drilling project will evaluate high-graded prospects interpreted from the seismic acquired in 1998."

The expected spud date is April 2000. Fletcher Challenge Energy, with partner Unocal, will drill three wells back-to-back and have an option to drill a further three wells.

Seismic interpretation and geological evaluation of the prospects in blocks A and C/D is well advanced and is expected to be completed by November 1999. Risk analysis and volumetric assessment will help to determine a portfolio of 8-10 prospects from which the best three to six will be selected for drilling.

Updated: November 1999