Performance of Petron Reported to Stockholders

April 26, 1999 PSE CIRCULAR FOR BROKERS NO. 875-99 Press Release April 26, 1999 PERFORMANCE OF PETRON REPORTED TO STOCKHOLDERS At its 5th Annual Stockholders' Meeting held this morning, Petron President Ali A. Al-Ajmi reported its 1998 financial and operating performance as well as its medium-term plans to some 2,000 stockholders in attendance. In his report Al-Ajmi informed shareholders that Petron ended 1998 with a net income of P3.7 billion a significant turnaround after the loss it incurred in 1997. prLL As a result of this favorable performance, a 20-centavo cash dividend to stockholders as of February 25, 1999 was declared early this year. Al-Ajmi also disclosed that, Petron is still the market leader, notwithstanding increasing competition. The company has made significant gains in the Reseller and Gasul trades as a result of its significant marketing investments. Last year , more than 60 new stations were constructed, bringing the total number of stations to 1,116. Around 100 existing stations were also reimaged to carry Petron's new look. The company also launched TREATS its own convenience store. Al-Ajmi added that aside from its aggressive sales and network expansion program, promotions such as Tic-tac-to-Millions, Gasul Kas-Cash Pabahay, and Pennzoil's Race to the USA also helped boost sales. In response to greater challenges in the deregulated environment, Petron initiated a number of programs that will help increase profitability and ensure cost efficiency. These initiatives included a performance-based pay scheme, the full integration of its supply, claim an enterprise-wide information technology project and an almost completed ISO program for major facilities. President Al-Ajmi also reported on new production facilities. The Continuous Catalytic Regeneration Reformer will allow the company to produce more unleaded gasoline and provide the hydrogen necessary to reduce the sulfur content in diesel. The Sulfur Recovery Unit will then convert the sulfur removed from the products into non-hazardous and commercially useful elemental sulfur. Another new facility is the Lube Oil Blending Plant, a highly automated and computerized facility that can produce various lube oil grades. Finally, Al-Ajmi announced to stockholders of the company's plan to put up conversion facilities and a power plant at its Bataan Refinery within the next four years. The conversion facilities will enable Petron to produce high-value white products and a by-product called petcoke that can be used to fuel the power plant.