Release: Matrix Oil update as at 24 March 2004

March 24, 2004 -- As you are aware, Matrix Oil (Langsa) Ltd, a subsidiary of the Company, entered into a Sale and Purchase Agreement (?SPA?) for the Langsa Technical Assistance Contract on 3 December 2003. I advise that the conditions precedent of the SPA have been met and that closure of the SPA occurred on 20 January 2004. To this extent, the principal consideration from the sale, being a percentage of the sale of all petroleum substances generated from production at the Langsa TAC, was received and has been advertised for sale. After a two month expression of interest phase an offer has been accepted and formal documentation in this regard is now being drafted.

In relation to the sale of the Glagah Kambuna Technical Assistance Contract and Asahan Production Sharing Contract, a number of conditions precedent still remain outstanding. Accordingly, the date for the satisfaction or waiver of these conditions has been extended to 30 April 2004 for both SPAs. We are continuing to assist the purchasers of the Glagah Kambuna TAC and Asahan PSC to satisfy all remaining conditions of the SPAs so that settlement can take place as soon as possible.

In addition, we are currently reviewing the possibility of restructuring the Company to enable it to relist on the ASX. In this regard, we will be shortly advertising for expressions of interest from interested parties and will advise shareholders and creditors of the outcome of any negotiations in due course.

Finally, pursuant to Subsection 11 1AT(l) of the Corporations Act 2001 (?the Act?) the Australian Securities and Investments Commission has granted the Company relief from complying with Part 2M.3 (Financial Reporting) of the Act. The relief commences from 15 March 2004 (but also exempts the Company from lodging the half-year 31 December 2003 report) and will conclude on the date that is earlier of two years from the date of commencement, or the date of termination of the Deed of Company Arrangement executed by the Company on 2 December 2003.

Vincent Smith
Joint and Several Deed Administrator

Editor?s note: Langsa TAC, Glagah Kambuna TAC and Asahan PSC are located offshore North Sumatra. In January, PT Medco Energi International confirmed that it, together with Japanese firm Mitsui Oil Exploration Co., Ltd, has acquired a 70 percent of working interest in Langsa TAC.