PSE Circular for Brokers No. 978-98

May 8, 1998 PSE CIRCULAR FOR BROKERS NO. 978-98 May 7, 1998 PHILIPPINE STOCK EXCHANGE Phil. Stock Exchange Centre Exchange Road, Ortigas Center Pasig City, Metro Manila Fax No. 636-0809 Attention: Ms . Maria Isabel T . Garcia Head, Listing Department Gentlemen : Pursuant to existing rules requiring the disclosure of material events affecting the company, we wish to report that our Consortium which holds exploration rights over the Etame Permit Area offshore Gabon, West Africa has spudded the first exploratory well under the contract, the Etame-1 well, last May 1, 1998. The Etame-1 prospect which has an areal closure of 14.2 square kms. (3,500 acres) lies in water depth of 75.9 ms. (249 ft.) and is being drilled using a Glomar Jack-up rig, the "Adriatic V", under the Operatorship of Vaalco Gabon (Etame), Inc., a wholly owned subsidiary of Vaalco Energy, Inc. of Houston, Texas. The Etame-1 is programmed to a Total Depth of 2,600 ms. (8,530 ft.) and has as its primary objective the Gamba Sand seismically mapped at 1,750 ms. (5,741 ft.) with the Dentale Sand below the Gamba Sand as the secondary objective. The well is currently at a depth of 956 ms. (3,136 ft.). cdt Alcorn Petroleum and Minerals Corp. (APMC) which originally had a 7.5% Participating Interest in the Etame contract farmed-out with the other interest owners a total of 65% interest to Western Atlas which conducted a 3-D seismic survey over the contract area and committed to bear 80% of the US$4.7 million well cost. The consortium members are Western Atlas, Vaalco, Petrofields Corporation which holds 14.525% interest and APMC which holds 2.625% interest. A similar but separate report has been filed with the Securities and Exchange Commission pursuant to its rules. Very truly yours, ALCORN PETROLEUM AND MINERALS CORPORATION By: (SGD.) PONCIANO K. MATHAY VP & General Manager