HK?s South Sea Petroleum farms in S. Sumatra exploration block

Hong Kong Bourse-listed company South Sea Petroleum Holdings announced Thursday that its wholly-owned subsidiary Global Select Limited, a wholly owned subsidiary of the Company, entered into a share purchase agreement with three individual Indonesia citizens, who in aggregate owned 70% interest of PT. Cahaya Batu Raja Blok (CBRB), to acquire a 65% interest in CBRB for US$5,800,000 on 7 April 2005,

CBRB sole asset is working interest in Air Komering onshore exploration block in South Sumatra. Under the PSC contract CBRB will explore and develop petroleum and natural gas in the block, an area consists of approximately 4,110 square kilometers for 30 years.

The block was granted to CBRB last year.

South Sea Petroleum said the block has the potential reserves of 250 million barrels of oil and 100 BCF of natural gas.

Payment schedule is as follows: 1. US$400,000 upon signing of Agreement; 2. US$400,000 within three months after signing the Agreement; 3. US$1,200,000 no later than six months after signing the Agreement 4. US$1,200,000 no later than nine months after signing the Agreement 5. US$2,600,000 no later than twelve months after signing the Agreement Funding of the Operation upon Acquisition .

Expected operation costs within the contract area for the first two years will be US$5,300,000 and US$12,000,000 for the next three years. The Company will bear the estimated cost in proportion to its 65% shareholding in CBRB. (alex)