Unusual Share Price Movement

March 26, 1998 PSE CIRCULAR FOR BROKERS NO. 494-98 March 25, 1998 PHILIPPINE STOCK EXCHANGE, INC. Philippine Stock Exchange Centre Exchange Road, Ortigas Center Pasig City Fax No.: 636-0809 and 637-8811 Attention : Mr . Joselito V . Santos Acting Head Compliance & Surveillance Group SUBJECT : Unusual Share Price Movement Gentlemen : In reply to your letter dated 25 March 1998 inquiring into any information relating to the unusual movement in the share price of Philodrill "A" (OV) and "B" (OVB) shares, which appreciated by 50% from P0.005 to P0.0075 per share today, 25 March 1998, please be advised as follows: 1 Philodrill is part of the Consortium that is currently drilling the wildcat Hippo-1 well in the Sulu Sea area (the "Project") under Geophysical Survey & Exploration Contract (GSEC) No. 74 with the Philippine Government. ARCO is the Operator of GSEC 74 and the lead party in the drilling operations. 2. Among the Filipino participants in the Project, Philodrill holds the biggest participating interest in Block A of GSEC 74. 3. In compliance with the Department of Energy's (DOE's) procedural requirements in any drilling operation and as provided in the Operating Agreement among the Consortium members, the Operator regularly distributes copies of its Daily Drilling Report to the DOE and all Consortium members. LLphil 4. Philodrill received by fax its copy of ARCO's Daily Drilling Report for today, 25 March 1998, only at 10:58 a.m.. Based on the numerous inquiries we were receiving even before this time, we understand that Philodrill shares were then already trading at P0.0075 per share. The unusual movement in the price of Philodrill shares was apparently fueled by speculative plays based on the prospects of the Project. Except for the foregoing factual circumstances, we are not aware of any other reason for the abrupt appreciation in the price of Philodrill shares. cdll We trust that the foregoing sufficiently addresses your query. Should you have any further question and/or clarification, please do not hesitate to call the undersigned at 631-1801 to 06 and 631-8151. Very truly yours, THE PHILODRILL CORPORATION By: (SGD.) ADRIAN S. ARIAS Corporate Secretary