ann

…/2
27th July 2006
Australian Stock Exchange Limited
Company Announcements Platform
20 Bridge Street
SYDNEY NSW 2000
LION ENERGY LIMITED (“LION”)
QUARTERLY ACTIVITIES REPORT
Quarter ended 30th June 2006
Highlights for the Quarter
§ During the quarter crude oil production from the Seram (Non-Bula) Block
PSC was 446,270 barrels of crude oil (compared to 336,035 barrels of
crude oil for the previous quarter) at a daily average of 4,904 barrels of
crude oil per day.
§ For the month of June 2006, crude oil production was 178,278 barrels of
crude oil at an average daily rate of 4,904 barrels per day,
demonstrating the effect of production from the Oseil-11 well, which
came on line on June 12th 2006.
§ On June 19th 2006, a load out of 365,634 barrels of HSFO (High Sulphur
Fuel Oil) was completed.
SERAM (NON-BULA) PSC
(2.5% contractor interest held through wholly owned subsidiary Lion Petroleum Seram Limited)
LION ENERGY LIMITED, through its wholly owned subsidiary Lion Petroleum
Seram Limited, holds a 2.5% shareholding 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, which has produced in excess of 4 million
barrels of crude oil since initial field start-up in January 2003 (cumulative crude
oil production to midnight 31st June 2006 was 4,086,64 barrels..
45 VENTNOR AVE
WEST PERTH
WESTERN AUSTRALIA 6005
TELEPHONE: +618 9429 8874
FACSIMILE: +618 9389 4462
ABN 51 000 753 640

— 2 —
Lion Energy Limited ABN 51 000 753 640
DEVELOPMENT DRILLING
The Phase II Stage 1 Development Drilling program was completed on June
12th 2006 with the completion of Oseil-11 development well. The drilling rig was
released on that day
Oseil-11
The Oseil-11 well was spudded on April 9th 2006 from the Oseil-2 pad and
completed for production on June 12th 2006.
SUBSEQUENT EVENTS
On July 13th 2006, CITIC Resources Holdings Ltd (CITIC), a company trading
on the Hong Kong Exchange (Code 1205) disclosed the acquisition of a 51%
participating interest in the Seram (Non Bula) Block Production Sharing
Agreement.
On 11 July 2006, CITIC Seram, an indirect wholly-owned subsidiary of the
Company, has agreed conditionally to acquire from KUFPEC a 51%
participating interest in the benefits, rights and obligations of the Contractor in
the Production Sharing Contract for a purchase price of US$97.4 million,
subject to adjustment.
BPMIGAS and the Government of Indonesia and which must be satisfied by
the Long Stop Date.
CITIC Resources Holdings Ltd. principal activities include production and sale
of aluminium smelter, coal, crude oil, plywood, and import and export of
commodities.
On July 22nd 2006, Gulf Petroleum Investment (GPI) announced that on July
20th 2006 GPI executed an agreement with KUFPEC to acquire 16.5% of that
company’s interest (of 97.5%) in the Seram (Non Bula) Block Production
Sharing Contract in Eastern Indonesia, for a consideration of US$44.5 million.
Gulf Petroleum Investment trades in the Oil Sector on the Kuwait Stock
Exchange, RIC Code GPIK.KW, in KUWAIT. The company's main activities
include oilfield services, renting equipment and trading in oil and petrochemical
derivatives.
Lion Energy Limited is in discussions with CITIC re that company’s future plans
in the Seram (Non Bula) Block joint venture, given it will become the largest
shareholder when and if the transaction completes.
Sincerely
Russell E Brimage
CHAIRMAN
LION ENERGY LTD