Lion Energy: Activity Update

Following is the report of Lion Energy Ltd to the ASX on 31 August 2004:

Oil lifting completed from Seram (Non Bula Block) joint venture was 356,324 barrels of HSFO completed on 24 August 2004.

Oil lifting completed from Bula Block oilfields was 40,105 barrels of crude oil, completed on 9 July 2004.

Details:

SERAM (NON BULA BLOCK) JOINT VENTURE

Lion Energy Limited is a 2.5% shareholder in the Seram (Non Bula) block production sharing contract. The major shareholder and operator of the joint venture is KUFPEC (Indonesia) Limited with 97.5%.

The block contains the Oseil oilfield.

Production for June 2004 and the cumulative results are tabulated below:

?	July 2004 (barrels)	Cumulative (barrels)
Crude Oil Production	87,865	1,928,891
HSFO Production	82,147	936,736
Naptha Production	5,383	63,610

During the month of July 2004, well uptime averaged 99% for three wells: Oseil-1, 2, & 4.

Lifting of High Sulphur Fuel Oil (HSFO) was completed on 24 Aug 2004 of 54,661 metric tonnes (356,324 barrels).

The phase II drilling program, which is forecast to lift production to 18,000 BPOD by second quarter 2005, is now scheduled to spud the first development well in early October 2004. The drilling rig being mobilized from Australia was delayed on existing contract work.

BULA BLOCK OILFIELDS

Lion Energy Limited is the 100% contractor shareholder and operator of the Bula block. The block contains the Bula oilfields.

Production for July 2004 was 15,318 barrels for a daily average of 494 BPOD.

A lifting of 40,105 barrels was completed during the month of July 2004 at a price of US$30.24 per barrel.

Oil in stock at 31 July 2004 was 20,157 barrels. (*)