possible first targets

Old ann but knowing that LIO are already in discussion with Citic for when this goes ahead in my opinion they will target these low cost wells and get into it really quickly.

Money will not be a problem from here on in as we will see this area really get developed by Citic as they have said it is conservative to say that they will double production. I still think we may see a huge hit at .004 soon as the chinese up the anti either way this is going to go up.

All should be finalised within the month and then things will start to happen it is obvious that this area has been held bak by Kufpec's lack of aggressive exploration and LIO's previous management so with Citic on board and hungry for success things are about to get interesting.


10 April 2006
Company Announcements
Australian Stock Exchange Limited
COMPANY UPDATE
Lion Petroleum Seram Limited (LPSL), a wholly owned subsidiary of 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%.
Further to the company’s ASX release of 21st February 2006 in which the
activities of Lion Energy Limited (ASX code: LIO) were updated, specifically the
the Dawang and Solan shallow drilling prospects identified by LIO in the Seram
(Non Bula) Block, the company advises:
1. In accordance with LIO’s intention to submit to the Seram (Non Bula)
Block joint venture that Dawang and Solan shallow drilling prospects
be added to the 2006 Work Program and Budget (as an
amendment), the company (through LPSL) presented the prospects
to the joint venture Operating Committee on March 23rd 2006.
2. Under the terms of the Joint Operating Agreement (JOA), if the
Operating Committee fails to include the program in the 2006 Work
Program and Budget within a specified period, then any party may
give notice to the other parties of its sole risk intention.
3. Subject to the Operating Committee’s election, LIO will then
determine its course of action, to either exercise its sole risk rights
under the JOA, or participate as a joint venture partner at its joint
venture equity or such other equity level as it is able to negotiate with
the joint venture.
LIO consider the Dawang and Solan shallow drilling prospects to be low risk
exploration opportunities. LPSL’s access to infrastructure can enable these
wells to be drilled at minimal cost, and in the event of a discovery, to be
developed quickly and the reserves exploited under favourable operating costs.
Further announcements will be made as decisions of the Operating Committee
are forthcoming.
Russell Brimage
CHAIRMAN