Petrel Resources Regulatory News (PET)

26 Jul 2006 13:13

Petrel Resources PLC26 July 2006 Petrel Resources plc Highlights of statement made by David Horgan, Managing Director PetrelResources, at the AGM Wednesday 26th July 2006 We remain focused on our long-standing objective of building an Iraq-centred oiland gas independent. The Subba & Luhais project is on track. So far there have been no insuperablesecurity problems. Suppliers continue to give strong support. Staff morale andcommitment are excellent. International groups are interested in partneringwith Petrel. Rising tensions in the Middle East have created problems - but they aredifficulties we prepared for and are better positioned for than are otherwestern companies. We expected recent events and anticipate further challenges. The commitment of industry players to Iraqi oil development has been tested.Most have folded. We continue to expand and deepen our involvement. Whatothers see as difficulty, we see as opportunity. Events have driven the oil price to historic highs - increasing the potentialvalue of our investment." Iraqi oil field development contract Petrel's priority is the $197 million Subba & Luhais oil field developmentservices contract in southern Iraq. This is the biggest contract awarded by theIraqi Ministry of Oil since 2003. The project is on track and on budget: 1. Engineering Design is underway - 75% of the Basic Design Package is complete - we expect a final review in late August, triggering a second milestone payment. 2. Our design focus is now switching to technical data for major equipment orders. We are finalising a key order representing about 20% of the material supply budget. 3. We will shortly survey field and pipeline routes. This will enable us to finalise steel pipe quantities and secure payment for an additional 20% of the materials supply budget. 4. The Joint Venture with our Iraqi partner is running well: all bonds are in place. We have agreed processing site layouts. 5. We have established excellent relations with the Trade Bank of Iraq. Funds drawdown has started. TBI confirmed they will issue Letters of Credit - subject to finalising terms. This augurs well for future business. Iraqi oil exploration Petrel signed a Technical Cooperation Agreement on the Merjan oil field, incentral Iraq, with the Ministry of Oil in October 2005. The Merjan oil fieldwas discovered in 1983, but has not yet been brought into production because ofextraneous circumstances, including OPEC ceilings. The work programme formally kicked-off in May 2006. Petrel has now received thedata package and our technical staff and contractors have processed the seismicdata. It is now being reinterpreted. We hope to complete the study by endyear. Hydrocarbon Law review A fully sovereign government has taken office following successful electionswith a high participation rate. A priority is to review the Hydrocarbon Law,establishing the basis for foreign participation in Iraqi oil & gas. Policy fordownstream investment has been agreed, subject to parliamentary approval. TheIraqi Minister has stated his desire to establish a legal framework for upstreaminvestments by end 2006. Petrel is well placed to seize the opportunities which will open up. Motions The meeting approved all motions. This statement has been reviewed by Dr. David Naylor Geologist / Exploration &Development Manager. Contacts: David Horgan +353 87 292 3500John Teeling +353 1 833 2833 Bell Pottinger Corporate & Financial Nick Lambert +44 (0) 7811 358 764 Rowan Dartington Barrie Newton +44 (0) 117 933 0011 This information is provided by RNS The company news service from the London Stock Exchange