kalrez farms into cooper basin

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    HOMEX - Adelaide

    Kalrez Energy Ltd has entered into a farmin agreement with Victoria
    Petroleum NL to earn a 12.5% interest in the onshore South Australian
    Cooper Basin permit PEL 104.

    PEL 104 covers 1,069 square kilometres and is located immediately
    adjacent to the Tirrawarra Oil field, Australia's largest onshore oil
    field with estimated reserves of 70 million bbls and 340 billion
    cubic feet of gas. Also adjacent is the Fly Lake Oil and Gas field
    and the permit surrounds the Callabona oil discovery. In August 2002
    the Sellicks 1 well located 30 kms south of PEL 104 flowed 2,160
    barrels of oil per day.

    Kalrez considers the permit is highly prospective for both gas and
    oil in both the Permian and Jurassic sequences that are highly
    productive in the Cooper/Eromanga Basin.

    An independent consultant's initial study of the permit has outlined
    in excess of ten prospects and leads that are anticipated to require
    only further minor evaluation to become drillable.

    The initial proposed work program over the coming twelve to fifteen
    months will be to reprocess 1350 kms of existing seismic data, record
    150 kms of seismic followed by the drilling of two wells.

    Under the terms of the Agreement, Kalrez will contribute 25% of the
    initial work program to earn a 12.5% interest in PEL 104. The
    estimated cost of the program is A$4.2 million. After the initial
    program Kalrez will contribute to further exploration at its working
    interest rate (12.5%).

    Kalrez is pleased to be involved in exploring this highly prospective
    South Australian Cooper Basin permit and will follow with interest
    the current drilling program in the South Australian Cooper Basin of
    up to 10 wells by Beach Petroleum Limited, Cooper Energy NL and
    Stuart Petroleum Limited. Over the next twelve months any success in
    this drilling program will upgrade the prospectivity and focus
    attention on any adjacent areas such as PEL 104.

    Kalrez expects the exploration program to commence with seismic
    recording in the second half of 2003.

    Kalrez is pleased to be involved in a relatively low risk exploration
    program in a proven hydrocarbon province in Australia as an adjunct
    to its production in Indonesia.

    For further information please contact:

    Giuseppe (Joe) Mercorella
    Adelaide Office
    Ph: 08 8239 2666
    Fax: 08 8239 1744
    Email: [email protected]
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