Adelphi: Indonesian production sharing contract

(23 December 2008)--On 14 November Adelphi announced that it had acquired a majority interest (50.02%) in an Indonesian Production Sharing Contract - South Bengara-II (?PSC?).

The acquisition was in association with Continental Energy Corporation and GeoPetro Resources Company via the group?s joint venture company. ACG (South Bengara-II) Pte.Ltd (?ACG?). Adelphi owns a 50.002% interest in ACG and its new PSC.

ACG, in accordance with the terms of its bid and the PSC, was obliged to pay a signing bonus of US$1 million to the Indonesian Government and to complete a work program during the first three PSC contract years including at least 100 line kilometres of 2D seismic, and drilling one exploration well for a total minimum expenditure of US$7,850,000.

In accordance with the terms of the Joint Bid Agreement (?JBA?) with Continental and GeoPetro, Adelphi is to be fully carried through the first US$4 million of gross expenditure on this block including the initial $1 million signing bonus.

Unfortunately, despite the terms of the JBA, Continental and GeoPetro have failed on behalf of ACG to pay the signing bonus in the required timeframe and we are currently in discussions with the Indonesian Government as to the best way forward.

Further updates will be provided when they become available - however cancellation of the PSC is a distinct possibility unless the signing bonus is paid by ACG within any extension that may be granted to ACG by the Indonesian Government. (end of release)