RELEASE: Seram's Oseil production operations update

Kalrez Energy Limited is a 2.5% shareholder in the Seram Joint Venture that operates the Oseil oilfield. The major shareholder, and Operator of the JV, is KUFPEC (Indonesia) Limited with 97.5%.

Production from the Oseil oilfield commenced on December 30th 2002, with processing taking place through a Temporary Production System ("TPS") nominally rated to approximately 12,000 barrels per day throughput.

The TPS facility is a temporary process facility to be utilized until the permanent facilities currently being installed are completed. Current expectations are that the permanent facilities will be available during April 2003.

REPORTING PERIOD	From midnight (2nd Feb 2003) To midnight (16th Feb 2003)
Oil produced for the period	125,798 barrels of oil
Average daily production for the period	8,986 barrels of oil
Cumulative oil produced	367,097 barrels of oil
Oil sold during the period	241,299 barrels of oil
Oil in stock	125,798 barrels of oil

The above represent total production from the Oseil oilfield as reported by the Operator. Kalrez entitlement is 2.5% of this production after deducting operating costs and Indonesian government entitlements.

COMMENTS

All three wells Oseil #1, Oseil #2, and Oseil #4 on production.

Steam heaters arrived on location 3rd Feb. 2003 and are presently operating under field trial control and performing effectively in the TPS process system to assist in combating foam induced process problems and to aid water separation (emulsion breakdown).

Current operations are continuing production through the TPS system.

G A Mercorella, Chairman, Kalrez Energy Ltd. (*)