Release: Seram's Oseil production operations update

Kalrez Energy Limited is a 2.5 percent 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 percent.

Production from the Oseil oilfield commenced on December 30th 2002, with processing taking glace 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 16 March 2003 To midnight 23 March 2003
Oil produced for the period	41,769 barrels of oil
Average daily production for the period	5,967 barrels of oil
Cumulative oil produced	711,541 barrels of oil
Oil sold during the period	0 barrels of oil
Oil in stock	173,685 barrels of oil

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

COMMENTS

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

Wells being regularly monitored and adjusted to control water production. TPS facility unable to process higher water rates, hence requirement to adjust individual well rates based on water production variations.

Current operations are continuing production through the TPS system.

Your faithfully,

Guiseppe (Joe) Mercorella; CHAIRMAN KALREZ ENERGY LTD