Drilling Update; Etame No. 1 Offshore Gabon, West Africa

June 9, 1998 PSE CIRCULAR FOR BROKERS NO. 1280-98 June 8, 1998 PHILIPPINE STOCK EXCHANGE Phil. Stock Exchange Centre Exchange Road, Ortigas Center Pasig City, Metro Manila Fax No. 636-0809 Attention: Ms . Maria Isabel T . Garcia Head, Listing Department SUBJECT : Drilling Update; Etame No . 1 Offshore Gabon, West Africa Gentlemen : This has further reference to the on-going oil drilling operations at our Etame-1 prospect in Gabon, West Africa. After setting the 9 5/9" casing at 1,823 m., the well was drilled into the objective sequence of shales and sandstones. At 1,873 m. a drilling break was observed with corresponding increase in gas readings and significant pressure build-up from a sandstones encountered at depth. Initial evaluation indicated sandstone porosities of 25-30% with associated oil shows and significantly high gas reading from the 6 m sandstone section as the well was being circulated and mud being weighed up. The wellsite engineers deferred any coring program because of the unconsolidated nature of the prospective, sandstones that have been penetrated. The well will be drilled to a total depth of 2,500 m. after which logs will be ran to evaluate the oil shows so far observed from the well. The Etame No. 1 drilling is the first exploratory well to be drilled by a consortium composed of VAALCO, Western Atlas (both Houston based), SASOL of South Africa, APMC and Petrofields. Very truly yours, ALCORN PETROLEUM AND MINERALS CORPORATION by: (SGD.) PONCIANO K. MATHAY Vice President