Subject: Phillips Petroleum Upgrades Timor Sea Reserve Estimates 10%

Tuesday, December 26 6:57 PM SGT Phillips Petroleum Upgrades Timor Sea Reserve Estimates 10%

BRISBANE, Dec 22 Asia Pulse - US-based Phillips Petroleum has has upgraded estimated reserves at the Elang, Kakatua and Kakatua North oil fields in the Timor Sea by nearly 10 per cent.

Takeover target Petroz NL (ASX:PTZ), which has a 15 per cent stake in the fields, said reserves were now estimated at 28.3 million barrels, up from 25.5 million barrels.

However, the company does not expect any net benefit from the increase.

The fields are in the Phillips Petroleum operated ZOCA 91-12 area in the Timor Sea Zone of Co-operation.

Petroz said the revision was based on the production performance since remedial work and the drilling of a sidetrack well carried out during the first half of the year.

The new reserves estimate is expected to extend production to the third quarter of 2003 after 19.1 million barrels had been produced from the three fields to the end of November.

Remaining recoverable proved reserves are 9.2 million barrels, with Petroz's share topping 1.4 million barrels.

The fields are currently producing at approximately 17,000 barrels per day.

Petroz managing director Rod Brown said that the upward revision of reserves increased the valuation of ZOCA 91-12, but it was offset by the decline in world oil prices and a strengthening Australian dollar.

The benefits to petroz will also mooted by last week's increase in the capital expenditure required for the development of the $2.93 billion Bayu-Undan gas and liquids project, where Petroz has an 8.25 per cent stake.

Under the revised costings released last week Petroz's obligations to Bayu-Undan rose to $US129.4 million ($A234.17 million).

ZOCA 91-12 participants include Phillips Petroleum (42.4 per cent), Santos Ltd (21.4 per cent), Inpex Sahul Ltd (21.2 per cent) and Petroz (14.8 per cent).

Petroz is currently the subject of a 70 cents per share $160 million takeover bid by Phillips Petroleum.

Italy's Eni SpA, who had ts 56 cents per share trumped by the Phillips offer, has extended the deadline for its offer to give it more time to decide if a higher bid is warranted.

Petroz shares finished steady at 70 cents Friday.


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