Lion Energy reports oil production from Seram (non-Bula) PSC

The following is an excerpt taken from Australian firm Lion Energy Limited?s quarterly report released on Thursday.

SERAM (NON-BULA) PSC
(2.5% contractor interest held through wholly owned subsidiary Lion Petroleum Seram Limited)

LION ENERGY LIMITED, through its wholly owned subsidiary Lion Petroleum Seram Limited, holds a 2.5% shareholding in the Seram (Non Bula) Block Production Sharing Contract. The major shareholder and Operator of the Joint Venture is CITIC Seram Energy Limited (51%). Other shareholders are KUFPEC (Indonesia) Limited with 30% and Gulf Petroleum Investment (16.5%).

The block contains the Oseil oilfield which has produced since initial field startup in January 2003, cumulative crude oil production of 6,165,397 barrels to midnight 30th September 2007.

PRODUCTION
During the quarter crude oil production from the Seram(Non-Bula) Block PSC was 368,233 barrels of crude oil at a daily average of 4,003 BOPD over the quarter.

Inventory available for lifting at December 31st 2007 was 97,627 bbls of (high sulphur fuel oil) HSFO and 48,935 bbls of Naptha.

The following table shows production performance during the quarter.

YEAR 2007 PRODUCTION
MONTH	CRUDE OIL (BPM)	CRUDE OIL (BPD)	HSFO (BPM)	NAPTHA (BPM)
OCTOBER	124,419	4,013	129,503	8,549
NOVEMBER	120,310	4,010	103,378	6,898
DECEMBER	123,504	3,984	89,836	5,942

WORK PROGRAM & BUDGET 2008
The Seram (Non Bula) PSC partners met in late October, early November to discuss the Work Program & Budget for 2008 (?WP&B 2008?). The decision of the parties will be subject to Indonesian Government approval of the program.

The WP&B 2008 as expected, includes drilling to test one very significant sized prospect delineated by earlier work, several lower risk shallow oil prospects similar to the nearby Bula oilfield and several development wells intended to lift production levels.

LION?s direct cot to participate in the joint venture operations, including exploration development and production operations is forecast to be US$2,300,000 for calendar year 2008.

Based upon revenue projections from the Oseil oilfield and additional developments wells, revenue is projected to exceed expenditure for calendar year 2008, subject to crude oil prices remaining at or near current levels.

Further details on specific budgeted operations forming part of WP&B 2008 will be announced as costs are confirmed (through the tender process) and near to the actual operations implementation. (end of excerpt)