another announcement

ASX Announcement 20th April 2004 OSEIL OILFIELD UPDATE Lion Energy Limited is a 2.5% shareholder in the Seram (Non Bula) Block Production Sharing Contract.

The major shareholder, and Operator of the Joint Venture, is KUFPEC (Indonesia) Limited with 97.5%. The block contains the Oseil Oilfield. On March 5th 2004, all wells were shut in to effect repairs on the skimmer oil tank, where a leak has been detected. Further to the ASX Announcement of 15th March 2004, the company advises that repairs have been completed and the Oseil field reopening commenced on April 18th, 2004. The damage is considered by the Operator to be a warranty claim and accordingly notice has been served on the main contractor. The shutdown on March 5th 2004 resulted in minimal production of 14,789 barrels of crude oil for the month of March 2004. Cumulative Oseil field production to midnight on 31st March 2004 was 1,599,936 barrels. The company also advises that the Phase II Plan of Development approval was granted by the government authority BP MIGAS on 26th March 2004, clearing the way for commencement of the second phase of the development of the Oseil oilfield. The Phase II development involves infield development drilling scheduled to commence in July 2004 and forecast to increase production to approximately 18,000 barrels of crude oil per day by end 2004. The company will issue further updates on the Phase II development as activity proceeds. Whilst company management has been frustrated by the delays in completion of the Phase I development and associated cost overruns, the commencement of the Phase II development in July 2004 and increased production projections during the remainder of the year should herald the commencement of the long awaited significant cash flows from the project. Yours faithfully Lion Energy Limited G A Mercorella Executive Chairman
Lion Energy Limited (ACN 000 753 640)
Suite 33, 168 Melbourne Street, North Adelaide SA 5006
Tel: (08) 8239 2666 Fax: (08) 8239 1744 Email: [email protected]