Thursday 2 November 2000

Exploration LIFE - a LIFT Inspired Farm-in Event

LIFE is a UKOOA sponsored initiative designed to stimulate interest and to increase exploration activity in the UKCS, by:

* streamlining access to the UK industry for new entrants and start-ups

* providing a mechanism for aligning partner interests

* focusing attention on exploration and allowing the identification of cost effective multi-well programmes and prospect clusters

LIFE will be a co-ordinated offering of attractive farm-in opportunities over a fixed period of 90 days. Bids are to be in the form of specific work programmes (or funding thereof), with the most attractive bid which meets or exceeds the guideline offer to be accepted within 30 days of the offer deadline. Details of the blocks offered will be posted to a special area of the LIFT website (www.uklift.co.uk), although the block-offering companies will handle administration on a licence by licence basis. The UKOOA guidelines for the event are shown below.

The event is scheduled to commence in January 2000, and has the support of the DTI, PILOT, Brindex and the Non-Operators Forum.

Guidelines

1. Licence groups are encouraged to include as many blocks as possible which fall into the following categories:

Type 1: Blocks which do not have a firm activity in 2001 to be included. In this case all licensees equity to be made available on equal terms.

Type 2: Blocks having activity supported by a number of the licensees in which the remaining companies do not wish to participate. In this case only the latter companies equity to be available.

2. Companies are encouraged to support the inclusion of all blocks in which they are blocking activity.

3. Blocks will be announced on LIFT, on a special LIFE page.

4. Details for each block will be available through the LIFE area of the LIFT website. The following details are to be included:

* Block and licence number

* Expiry date

* Licence rental

* Current operator, partners and equity positions

* Confirmation that there are no outstanding commitments

* Equity available

* Proposed work programme and timing

* Guideline bid

* Brief technical summary

* Details of confidentiality and farm-in agreements

* Contact details

* Terms: operator transfer, bid conditions, acceptance conditions, environmental conditions, restrictions on pre-emption waiver, timing requirements

5. Bids should be sealed and in the form of work programme to be funded and percentage of licence expected in return. For type 1 blocks, either a fully-funded work programme should be offered, or a company/group may bid for a proportion of the available equity with a request for consideration to be merged with any other party or bid group.

6. The most appropriate work programme, which meets or exceeds the guide bid, will in principle be accepted.

7. In agreeing to include the blocks within LIFE the existing licensees agree that pre-emption rights will not be exercised, provided the guideline bid is met.

8. Existing licensees may bid on their own blocks.

9. The closing date for bids will be 90 days after LIFE is opened. Acceptance in principle will be made within 1 month. Blocks will not be withdrawn from LIFE after the start of the 90 day evaluation period.

10. Following completion of LIFE, the original licensees remaining may be offered on LIFT for trade or purchase.

11. Successful bidding companies will be published on LIFT.

For more information, please call 020 7802 2400.