PSE Circular for Brokers No. 2239-98

September 28, 1998 PSE CIRCULAR FOR BROKERS NO. 2239-98 September 23, 1998 Ms. Grace B. De Guia Supervisor Disclosure Department Philippine Stock Exchange PSE Center, Exchange Road Ortigas Center, Pasig City Dear Ms. De Guia : With reference to your fax letter dated 21 September 1998 clarifying/confirming a news article entitled "Four firms eye joint venture with the PNOC subsidiary" which appeared in the Philippine Star on 19 September 1998. PNOC-EC was not the source of the article nor was our President and CEO Rufino B. Bomasang interviewed by the said publication for the article. PNOC-EC, however, takes this opportunity to confirm the PSE that four energy companies have expressed interest in farming into the Cotabato Basin Exploration Project (CBEP) consortium. The four firms have yet to submit a final joint venture proposal to PNOC-EC in this regard and the talks essentially exploratory in nature yet. prcd While it is true that the first well, Tukanakuden-1, did encounter some gas and we believe the area has a potential of about 60 billion cubic feet, this potential needs to be confirmed by further drilling and more specifically, we need to validate the structural and reservoir characteristics previously obtained during the drilling of the Tukanakuden-1 well. As in all cases concerning hydrocarbon exploration, a potential is simply a potential requiring confirmatory drilling. Drilling itself does not by itself guarantee any positive results. The CBEP is covered by Geophysical Survey and Exploration Contract No. 73 granted by the Department of Energy in 1994 to a consortium headed by PNOC-EC. We hope these clarify the matter. Thank you and best regards. Very truly yours, (SGD.) ELPIDIO M. GAMBOA, JR. Legal Counsel & Corporate Secretary