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    HOMEX - Perth

    Oil production has commenced from the Oseil Oilfield, with oil
    currently flowing from Oseil-4 at a rate of approximately 4,000
    barrels of oil per day being delivered directly onto the oil tanker
    at the Oseil Jetty. There is currently over 10,000 barrels of oil in
    stock within the tanker.

    The Temporary Production System ("TPS") is being stabilised with
    production from Oseil 4, prior to Oseil-l and Oseil-2 being brought
    on stream over the next few days. The objective is to increase the
    flow rate to about 12,000 bopd over the next 7 to 10 days.

    The President of Kufpec (Indonesia) Limited, Mr David Lamb, has been
    quoted in early December 2002 in Petromindo.Com as saying "First
    phase development of Oseil field will commence between December 19 to
    December 21 this year with initial output of 8,000 barrels per day
    (BPD) of crude with peak production expected to reach 15,000 BPD in
    February next year."

    Kalrez Energy Limited is a 2.5% shareholder in the Seram Joint
    Venture which owns and operates the Oseil oilfield. The major
    shareholder, and operator of the JV, is Kufpec (Indonesia) Limited
    with 97.5%.

    This first production is the result of a work program that commenced
    with the initial discovery of Oseil-1 in 1993, with the development
    plan approved by Pertamina in January 2000.

    Initial oil production is through the TPS as the Final Acceptance
    Date for the Main Production Facility ("MPF") is currently scheduled
    for March 30th. As a result the current crude production will be
    unprocessed and will sell at a discount to the Products to be
    produced from the MPF when available.

    This unprocessed crude is being sold under contract to BP in
    Singapore, with contract pricing relating to Singapore High Sulphur
    Fuel Oil ("HSFO") pricing.

    More information on the Seram JV and the Oseil Oilfield is attached.
    For further enquiries please feel free to contact Mr Eddie Smith or
    Mr Simon Lill at the Company's offices on (618) 9362 9330.
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