PSE Circular for Brokers No. 204-99

February 3, 1999 PSE CIRCULAR FOR BROKERS NO. 204-99 February 2, 1999 Ms. Eileen M. Lacorte Analyst Disclosure Department Philippine Stock Exchange PSE Center, Exchange Road Ortigas Center, Pasig City Attention: Grace B . De Guia Assistant Manager Dear Ms. Lacorte : With reference to your faxed letter dated 1 February 1999 regarding the news article entitled "PNOC EC to start drilling in Fuga by June-Mitra" which appeared on page 24 of the Philippine Star, we would like to confirm that PNOC EC was recently elected by its consortium partners as operator for Geophysical Survey & Exploration Contract (GSEC) No. 84. LLphil Recognition of the change of operatorship was officially made by the Department of Energy (DOE) last 26 January 1999 GSEC 84 envers 830,000 hectares of predominantly offshore license acreage over the Aparri area and the Babayan Channel. The consortium is composed of four Australian companies and PNOC EC with the following participating interest: Euro Pacific Energy (27.5%), Sirling Resources (25%), Hardman Resources (32.5%), PNOC EC (15%) and SOCDET Production (10%). The Fuga prospect has over since been the focus of exploration efforts by the GSEC-84consortium. Technical evaluation by Stirling has placed reserves potential of the prospect between six and 18 trillion cubic feet of gas. Exploration efforts had earlier been limited by the refusal of the island owner, Tan Yu's Fuga Island Holdings Inc. (FIHI) in grant access thus forcing the DOE to suspend GSEC-84 work commitments in December 1997. Very recently however, FIHI relented and had advised the DOE of its willingness to allow access to the island only for predrilling activities in order for the consortium to undertake geological mapping and survey work for the environmental permitting in preparation for a well drilling possibly in June. prcd We hope these clarify the matter. Thank you and best regards. Very truly yours, (SGD.) ELPIDIO M. GAMBOA JR. Corporate Secretary