Release: Kalrez' Bula development update

Wholly owned subsidiary Kalrez Petroleum (Seram) Limited is operator and 100 percent Contractor equity holder of the Bula Block Production Sharing Contract on Seram Island in eastern Indonesia. Production from Bula averages approximately 520 BOPD.

On the 7th of January 2003, Kalrez reported development well 89K-5 spudded on December 31st 2002 in the Bula Tenggara field.

Since the last report, 7" casing was set to 225 mKB. Remedial work was required as the cement job failed at the first attempt due to gas channeling up the 7" by 9-5/8" annulus.

After completing this remedial work, the 7" casing shoe was drilled out and hole depth opened to 255 mKB.

Four joints of 4-1/2" gravel pack screen was then landed at the 7" shoe to 255 mKB. 2-3/8" tubing was run to 208 mKB on the evening of January 20th 2003.

The well was then allowed to flow back and has been intermittently unloading mud, emulsion and oil on natural flow.

Current operations are rigging up to swab well to assist well cleanup, using the company's service rig.

Drilling Rig 482 was released on January 23rd, 2003.(*)