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 May 2003.

.

REPORTING PERIOD	From midnight 31 March 2003 To midnight 30 April 2003
Oil produced for the period	164,907 barrels of oil
Average daily production for the period	5,497 barrels of oil
Cumulative oil produced from 31/12/2002	892,761 barrels of oil
Oil sold during the period	246,065 barrels of oil
Oil in stock	141,289 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

Oseil field shut in for tanker change-out at 10:30 hours 6th April 2003 and reopening commenced at 21:00 hours 8th April 2003.

On 29th April 2003, Oseil-2 shut in and diverted to new Field Facility for commissioning. Commissioning of this facility continues utilizing Oseil-2 production.

The Field Facility (FF) forms part of the Engineering Procurement Installation & Commissioning Contract (EPIC). A consortium of PT Istana Karna Karang Laut (IKL) and Daewoo Corporation was awarded the contract on October 3rd 2000.

The Oseil Oil Field Development Phase 1 EPIC comprises the Field Facility where all well flows are initially received, a pipeline for transmission of the crude oil from the Field Facility to the Main Production Facility (MPF) where the crude oil is processed into Naptha and High Sulphur Fuel Oil (HSFO) and an export facility for shipment of refined product.

The pipeline and export facility are complete and in use. Commissioning of the MPF is expected to follow the commissioning of the FF.

EPIC Lumpsum Price is US $ 68,500,000.00.

When commissioning of the FF is complete, the other two Oseil wells (Oseil 1 & 4) will be trimmed to the new facility and the TPS decommissioning will commence thereafter.

Your faithfully,

Guiseppe (Joe) Mercorella; CHAIRMAN KALREZ ENERGY LTD