All Systems Go For Well Drilling in Cotabato Basin

April 30, 1999 PSE CIRCULAR FOR BROKERS NO. 946-99 ALL SYSTEMS GO FOR WELL DRILLING IN COTABATO BASIN Exploration Corporation (PNOC-EC) is all set to resume drilling operations in mid-July (Illegible portion in Philippine Stock Exchange file) natural gas prospect in the Cotabato Basin in Mindanao. The project will initially involve the drilling of a shallow well in Barangay Tukanakuden, Sultan-sa-Barongis, Maguindanao. cdll Sultan-sa-Barongis 1 (SSB-1) well will be drilled to a total depth of 2,100 feet adjacent to previous Tukanakuden 1 (TKN-1) well. It will be recalled that a PNOC-EC (in a joint venture in Malaysia's PETRONAS Carigali and Petrofields Corporation) drilled the TKN-1 well in the locality from December 1995 to February 1996. Though the well did not encounter the targeted oil reservoir, the drilling encountered a gas- (Illegible portion in Philippine Stock Exchange file) zone which will be the focus of PNOC-EC's forthcoming operations. The Sultan-sa-Barongis gas prospect has the potential to contain up to 60 billion cubic feet of gas enough to fuel the megawatt gas-fired power plant for 20 years. PNOC-EC's initial gas development at program will entail road and site preparation/clearing and (Illegible portion in Philippine Stock Exchange file) mobilization from mid-April to early July. The drilling of SSB-1 is programmed to (Illegible portion in Philippine Stock Exchange file) the reservoir and producibility characteristics. If the results prove favorable, a stepout (SSB-2) will be drilled near the interpreted crest of the structure located 2.5 kilometers west of TKN-1. The stepout well will delineate the areal extent of the reservoir and confirm the volume potential. The estimated cost of the SSB-1 well is US$1.6 Million. PNOC-EC is closely coordinating with the concerned local government, military and civilian (Illegible portion in Philippine Stock Exchange file) ensure smooth project operations. The Cotabato Basin Gas Development Program is (Illegible portion in Philippine Stock Exchange file) to generate cheaper electricity in the area, royalties and taxes to the local government (Illegible portion in Philippine Stock Exchange file) possible employment for local residents apart from the infrastructure projects and (Illegible portion in Philippine Stock Exchange file) activities which may be stimulated. Member of the GSEC 73 consortium are PNOC-EC and Petrofields Corporation with 87.5% (Illegible portion in Philippine Stock Exchange file) participating interest, respectively.