Petrel Resources Regulatory News (PET)

22 May 2007 07:00

Petrel Resources PLC22 May 2007 PETREL RESOURCES PLC PRODUCTION SHARING AGREEMENT IN JORDAN FINALISED • East Safawi Block is prospective exploration territory, close to producing fields• 3 year exploration programme agreed, commencing with technical analysis and seismic to define drilling targets Further to the announcement on 1 May, Petrel Resources, the AIM-listed oilexplorer and developer operating in Iraq, confirms finalisation of a ProductionSharing Agreement (PSA) on the East Safawi Block in Jordan. King Abdullah ofthe Hashemite Kingdom of Jordan attended the ceremony, where a total of $2.5billion of investment was announced by the Jordanian authorities. East Safawi forms part of the prospective Arabian Desert. The East Safawi blockadjoins the producing gas field at Risha and oil producing blocks in Syria. Theoil targets are in shallow formations and there are well-established gas playsat depth. Jordanian Production Sharing terms are clear and attractive. The contractorreceives 60% of oil production - or gas equivalent - up to 10,000 barrels daily,with a sliding scale to a 35% share of production over 100,000 barrels daily oilequivalent. There were no material objections to the Petrel contract inparliament or elsewhere. The agreement envisages a 3 year first phase exploration. Initial work includesseismic reprocessing and reinterpretation and new seismic. Targets identifiedare expected to be drilled in 2008/09, depending on operational developments. Jordan is a stable constitutional monarchy. Building on the success of hisfather King Hussein, King Abdullah personally attended the East Safawi and othersigning ceremonies, which underlined Jordan's commitment to responsibleinternational investment. Jordan's success, based on pro-business policies, is a model for the region. Even political turbulence in neighbouring countries has been turned to advantageby Jordan, which has attracted outstanding entrepreneurs and investment. Historically, a concern was that Jordan is most prospective for gas. This isnow seen as an advantage, due to the massive international increase in demandfor natural gas, both in the region and further. With the Arab gas pipelineproject well advanced, and planned to extend to Turkey and into the Europeannetwork, Jordan will be both a supplier and reliable access route for MiddleEastern gas exports to Europe. Petrel Managing Director, David Horgan, commented:'East Safawi is prospective: analysis reinforced our belief that the Arabian Desert has considerable oil and gas potential. At a time of resource nationalism elsewhere, we are heartened by Jordanianconsensus in favour of this project. There were no objections in Parliament orthe mainstream media to Petrel's contract. His Majesty publicly demonstratedcommitment by hosting the signing ceremony - giving comfort to citizens andinvestors. Winning the East Safawi Production Sharing Agreement is the culmination of threeyears work. Terms are world-class, especially for oil. Jordan is both secureand pro-business, complementing Petrel's Iraq-centred strategy'. Contacts: David Horgan, Managing Director + 353 87 292 3500John Teeling, Chairman + 353 1 8332833 College HillPaddy Blewer +44 (0)20 7457 2074Nick Elwes Blue Oar SecuritiesJohn Wakefield +44 (0) 117 93300 Directors: John Teeling, Chairman, David Horgan, Managing, Guy Delbes (FR), Stefano Borghi (ITL), Jim Finn, Company Secretary Registered Office: 162 Clontarf Road, Dublin 3, Ireland 20 This information is provided by RNS The company news service from the London Stock Exchange